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Generous Tax Benefits
for Generous Gifts |
The Tax-Smart approach to Gifts.
Instead
of selling something, such as appreciated stock, and giving the cash to
charity,directly give the charity appreciated assets that owned
for more than a year. First, you avoid the Capital Gains tax on the
appreciation. Secondly, you charitable donation will be a deduction on
your tax return.
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If
you're giving away a substantial amount, you need
to choose your charity and make your donation carefully.
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Example:
If you have
$11,000 in an appreciated publicly trade stock that you bought for
$1,000 that you want to give to charity, donating the stock is better
than selling and donating the proceeds. If you donated the stock, the
charity receives $11,000. If you sell the stock, State and Federal
Income Taxes, even at capital gains rates, results in a $2,000 tax. The
net to the charity is $9,000.
Note,
you must donate the appreciated assets to churches, relifious groups,
schools, hospitals and other public charities known as "50 percent"
charites. You can deduct 30 percent of your adjusted gross income.
You don't have to worry about all these rules if
you're simply writing a $25 check. But the rules are
complicated when making very large charitable contributions.
To be sure your donation is proper, check with your tax
attorney, Ronald J. Cappuccio, J.D., LL.M. (Tax) at
(856) 665-2121.
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