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Gifts of Appreciated Stock

  • Do you have securities that you've owned for more than one year and are worth more than you originally paid for them?
  • Do you want to avoid paying taxes on their appreciation?
  • Can you afford to give up ownership of these securities?
  • Would you like to support our mission today?

If you can answer "yes" to each of these questions, a charitable gift of stock probably meets your needs.

A stock portfolio is often among the most valuable assets you own - and one that can carry substantial capital gain, or appreciation in value. With careful planning, you can reduce or even eliminate federal capital gains tax while supporting the work of West Lafayette Schools Education Foundation.

How It Works

As stock prices increase, so do the taxes you own on the long-term capital gain, which are charged at a maximum rate of 20 percent (0 percent if your income falls below the 25 percent tax bracket and 15 percent if your income falls below the 39.6 percent bracket). But when you donate publicly traded stock you've owned for more than one year to a qualified charitable organization, such as WLSEF, you enjoy two major tax benefits:

  • You will be exempt from paying capital gains taxes on any increase in value - taxes you would pay if you had otherwise sold the securities.
  • You are entitled to a federal income tax deduction based on the current fair market value of the securities, regardless of their original cost.

The income tax deduction for long-term capital gain property is limited to 30 percent of your adjusted gross income in the year to make the gift, but your excess deduction is deductible for up to five additional years.
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Example

A donor wants to make a charitable gift of $10,000. He can make his gift with either cash or stock. He has a marginal federal income tax rate of 28 percent and is not subject to state or local income taxes. The stock's value is $10,000 with a cost basis of $4,000.

In this example, using the stock value instead of writing a check saves an added $900. A higher federal tax bracket and any state or local income taxes would further improve the donor's results.

How to Give Securities

A. Transfers from a Bank or Broker (most common)
If the securities are held by your bank or broker, we recommend an electronic transfer via the Depository Trust Company (DTC) system. Two steps are needed:

1. Give your bank or broker the following instructions:
DTC# 0793
Stifel
For Credit to Account: 50629108
Account name: West Lafayette Schools Education Foundation

2. It is imperative that you also email the details of the transfer to email address alerting WLSEF to expect this gift. Failure to provide this information may cause a delay in recognizing you as the donor. Please include the following information in your email:

  • your name and address
  • the name and ticker symbol of the security
  • the number of shares
  • the school or department gift fund to be credited

For more information, contact Lindsay Walls at 765-269-4007 or email us at wlsef@wl.k12.in.us.

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