Donate Stocks Instead of Cash for Much Bigger Impact
When most people donate money, they do it by sending cash from their checking accounts. But we’d like to suggest “a more excellent way.” By donating shares of stocks, bonds, or mutual funds to your Donor Advised Fund (DAF) before liquidating them, you can make larger gifts, pay lower taxes, improve your cash flow, and simplify your giving for a multi-dimensional win.
The key is to donate such assets before selling them.
Here are some of the major advantages:
- Eliminate capital gains tax on the donated stock.
- If you donate the stocks, ETFs, and mutual fund shares that have done well and selling the ones that have lost money, you can rebalance your portfolio tax free across all market cycles!
- If you still like the stock you donated, you can repurchase it again for a higher cost basis and lower future tax exposure.
- Receive your tax deduction precisely when you need to realize your gains/ losses, and then decide where to donate the proceeds later.