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Saving taxes probably isn\u2019t your primary reason for supporting your favorite charities. But tax deductions can be a valuable added benefit. If you donate long-term appreciated stock, you potentially can save even more.<\/p>\n
Not just a deduction<\/strong><\/p>\n Appreciated publicly traded stock you\u2019ve held more than one year is long-term capital gains property. If you donate it to a qualified charity, you may be able to enjoy two tax benefits.<\/p>\n First, if you itemize deductions, you can claim a charitable deduction equal to the stock\u2019s fair market value. Second, you won\u2019t be subject to the capital gains tax you\u2019d owe if you sold the stock.<\/p>\n Donating appreciated stock can be especially beneficial to taxpayers facing the 3.8% net investment income tax (NIIT) or the top 20% long-term capital gains rate this year.<\/p>\n The strategy in action<\/strong><\/p>\n Let\u2019s say you donate $15,000 of stock that you paid $5,000 for, your ordinary-income tax rate is 37% and your long-term capital gains rate is 20%. Let\u2019s also say you itemize deductions.<\/p>\n If you sold the stock, you\u2019d pay $2,000 in tax on the $10,000 gain. If you were also subject to the 3.8% NIIT, you\u2019d pay another $380 in NIIT.<\/p>\n By instead donating the stock to charity, you save $7,930 in federal tax ($2,380 in capital gains tax and NIIT plus $5,550 from the $15,000 income tax deduction). If you donated $15,000 in cash, your federal tax savings would be only $5,550.<\/p>\n 3 important considerations<\/strong><\/p>\n There are a few things to keep in mind when considering a stock donation:<\/p>\n 1. The charitable deduction will provide a tax benefit only if your total itemized deductions exceed your standard deduction.<\/strong> For 2025, the standard deduction is $15,750 for singles and married couples filing separately, $23,625 for heads of households, and $31,500 for married couples filing jointly.<\/p>\n 2. Donations of long-term capital gains property are subject to tighter deduction limits.<\/strong> The limits are 30% of your adjusted gross income for gifts to public charities and 20% for gifts to nonoperating private foundations (compared to 60% and 30%, respectively, for cash donations).<\/p>\n 3. Don\u2019t donate stock that\u2019s worth less<\/em> than your basis.<\/strong> Instead, sell the stock so you can deduct the loss and then donate the cash proceeds to charity.<\/p>\n A tried-and-true year-end tax strategy<\/strong><\/p>\n If you expect to itemize deductions on your 2025 tax return, making charitable gifts by December 31 is a great way to reduce your tax liability. And donating highly appreciated stock you\u2019ve hesitated to sell because of the tax cost can be an especially smart year-end strategy. To learn more about minimizing capital gains tax or maximizing charitable deductions, contact us today.<\/p>\n \u00a9 2025<\/em><\/p>\n <\/body> Saving taxes probably isn\u2019t your primary reason for supporting your favorite charities. But tax deductions can be a valuable added benefit. If you donate long-term appreciated stock, you potentially can save even more. Not just a deduction Appreciated publicly traded stock you\u2019ve held more than one year is long-term capital gains property. If you donate […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,6,10],"tags":[8,11,12],"class_list":["post-17435","post","type-post","status-publish","format-standard","hentry","category-articles","category-individual-tax","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=17435"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17435\/revisions"}],"predecessor-version":[{"id":17436,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17435\/revisions\/17436"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=17435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=17435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=17435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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