What are the tax benefits of giving appreciated securities?
Making a gift of appreciated securities can benefit you in two ways: you receive a charitable income tax deduction for the full fair market value of the securities; at the same time you avoid capital gains taxes on the appreciated securities.

How do I calculate the gain?
You measure the gain by the difference between the cost basis (the amount you originally paid for the security) and the fair market value of the security.

Do I have to have held these securities for a certain period of time?
These rules cover long-term appreciated securities that you have owned for at least one year.

Are there any limits to the deduction?
For long-term appreciated securities, you can deduct up to 30% of your adjusted gross income. You can carry forward any unused deduction for up to five years and use it on upcoming tax returns.

Are there any restrictions as to types of securities I can give?
Generally, publicly traded securities work best. These include stocks, bonds and mutual funds.

Do I need to get an appraisal to donate appreciated securities?
No. If there is a market for the securities on a stock exchange or in an over-the-counter market, you do not need an appraisal.

How do I calculate the "fair market value" of the security for income tax deduction purposes?
You calculate the mean (average) between the highest and lowest quoted selling prices per share on the valuation date.

What is the valuation date?
The valuation date is generally the date that the security is actually transferred to WSPA.

Can I combine giving appreciated securities with other types of gifts for even more advantage?
You certainly can. You can use appreciated securities to fund charitable gift annuities and charitable remainder trusts. This way you can increase your income as well.

Should I give securities I own that have a loss?
No. It is better to sell the securities that have losses and use the loss to offset other gains you may have. You can then donate cash or other securities that have a gain.

Can you provide an example of why it's better to give stock than to sell the stock and then give cash?
As you can see from the table below, both you and WSPA are better off with a gift of appreciated stock. You make a larger gift to help the animals, avoid significant capital gains tax, and get a larger charitable income tax deduction.

General Example:	Sale	Gift to WSPA
Stock Value	$10,000	$10,000
Cost Basis	$2,500	$2,500
Sale of Stock	$10,000	0
Capital Gain on Sale	$7,500	0
Capital Gain Tax on Sale	$1,500	0
Net proceeds	$8,500	$10,000
Deduction	$8,500	$10,000

Is there anything else to keep in mind?
You need to contact WSPA directly to coordinate the gift of securities. You also need to ask for current "delivery instructions" to make sure there is no confusion when transferring the securities to WSPA's brokerage account.

Are there any other "wrinkles" that can make this even more interesting?
After giving appreciated securities, you could simply purchase the same security at the current market value. That way, you would have a new, higher basis in the stock and thus pay less capital gains tax when you sell the new shares later. You save twice.

For more information, please contact:

Donate Securities Now

WSPA does not seek to replace the advice of your own tax counsel. Please consult your own advisors before taking action. Figures are for illustration purposes only and are subject to change.