The Advantages of Giving Securities to Open Arms International
When you give stock, bonds, or mutual fund shares to Open Arms International (OAI), you are helping transform Africa, one life at a time by providing food, clothing, housing, medical care and an education to vulnerable and abandoned children in Kenya.
If you have stocks, bonds, or mutual fund shares that you have owned for more than one year, you may donate them to OAI and use their fair market value when gifted as the amount of your donation. This benefits both OAI and you. You are not required to pay any capital gains taxes on the transaction because you have donated the security rather than sold it. And the OAI receives the full value of the stock, bond, or mutual fund shares to help advance our work with children in need.
For example, let's suppose you own shares of a stock you bought five years ago for $1,000 that are now worth $5,000. By donating this stock instead of selling it, you get a deduction for the stock's fair market value on the date of the gift ($5,000), plus you avoid paying long-term capital gain tax on the $4,000 profit on your initial investment. And, Open Arms International would receive the full $5,000 value of your donation.
To qualify for this special tax benefit, you must have held the stock for longer than one year. If the shares have been held for one year or less, your charitable deduction per IRS rules is limited to your initial investment – in the case of our example, $1000. The IRS does place limits the charitable deduction of appreciated property so please consult with your accountant.)
There is another advantage to donating stocks, bonds or mutual fund shares. If your portfolio had some losses, you would typically write them off against your gains to minimize the capital gains tax. But if you give away your gains, you can still use your losses (up to $3,000 a year) to reduce your regular income. For most people, this can produce a greater tax benefit since income tax rates on regular income are generally higher than on long term capital gains.
Please contact Dave Redelfs at 503-296-9989 with any questions or for instructions for making a securities or mutual fund donation.