Win-Win Giving of Securities – by Tom Halter

As the CFO/Assistant Treasurer of the City Bar Fund, I consider giving to charity to be a vital and noble practice. Some pundits say that those who make philanthropic gifts live longer. To follow the path of charity and at the same time add years to one’s life is clearly a wonderful win-win situation, but I leave the proof to others.

For those who own securities, though, there is another great win-win situation associated with charitable giving that I am happy to promote and document: gifting appreciated long-term securities to a nonprofit.

A gift of appreciated securities held for more than one year may provide significant benefits to you as a contributor, such as:

• Entitling you to a charitable income tax deduction for the fair market value of the gifted securities as of the date of the gift.
• Eliminating capital gains tax that would ordinarily become due if you sold the appreciated securities on the open market and donated the proceeds to charity.
• Claiming your charitable deduction against up to 30% of your adjusted gross income.  Any unused deductions can be carried forward over the next five years.
• Providing a way to help you to achieve your long-term financial objective of reducing your income and estate taxes.

There are some things to keep in mind. If you have securities that have declined in value over the years and are interested in donating them to charity, you may find it more advantageous to sell the securities first and contribute the proceeds to charity as opposed to donating the securities outright.  This strategy should allow you to claim a deduction for both the loss from the sale of the securities and the charitable gift.

If you are considering donating stock that is subject to a cash merger or tender offer, it is important for you to note that you will be subject to tax on the capital gain even though the shares were transferred to the charity before the tender offer became effective.

There may be particular circumstances relevant to your financial position, so it is always important to consult your tax advisor.

If you are interested in making a gift of securities to the City Bar Fund or one of its departments, please email either me or Marilyn Casowitz to obtain the stock transfer instructions.

All the best for the holidays!

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A copy of the City Bar Fund’s most recent annual financial report may be obtained from the City Bar Fund or the New York State Attorney General’s Charities Bureau, ATTN: FOIL Officer, 120 Broadway, New York, NY 10271.