Aug 08, 2023
For many clients who are charitably minded, donating appreciated stock is a fantastic way to give to an important cause while creating additional tax flexibility within the giver’s portfolio. Unfortunately, many are not aware of this option or only think of it after gifting is already done. As year-end approaches, here is a refresher on the process and things to know.
Stock positions with long-term unrealized gains can be donated to qualified philanthropic organizations and the donor will receive the same tax deduction as if they had given a cash donation. The receiving institution is not hampered in any way by the donation or the unrealized gains associated with the gift, and the donor is free from the gains within their own portfolio.
As an example: Rather than writing a check for $3,500, someone could just as easily donate 20 shares of Apple stock (which is trading at around $175 per share). The tax deduction would remain the same for the donor at $3,500, but if the Apple stock had a low cost basis (purchase price), the portfolio could “drop” the burden of capital gains on the 20 shares without repercussion to the donor or the charity. If the account is still intended for long-term appreciation, the $3,500 check that would have been used to make the donation could be deposited into the brokerage account to replace the positions removed from the portfolio and could be diversified with a new cost basis.
Things to Know:
What We Need to Know:
If you are interested in making a charitable donation out of your portfolio, we need to know:
What We Look For:
When selecting positions to donate, we typically focus on:
If you have an interest in donating stock, we recommend making such moves prior to December to ensure timely execution for the tax year. If you can provide details on how much you want to donate and where it is going, our Investment Committee will curate a list of positions to donate and our Client Service Team will take the lead on drafting paperwork.
Andrew’s career with Narwhal began as an intern during the summers of 2008 and 2009. He was hired in a full-time capacity in 2011. Andrew oversees the strategic direction of the firm and enjoys a role split between portfolio management, client engagement and operations. He previously served on the Advisory Board for the Mercer University Student Managed Investment Fund and completed the Charles Schwab Executive Leadership Program as a member of the 2019 class. Andrew and his wife Amanda live nearby in Marietta with their two kids.
At Narwhal Capital Management, you’re more than just a portfolio, and it’s not all about the numbers. Let’s start with a meeting about your needs and future goals.