Investing with Faith / Elisa Smith

Now is the time to take stock of your year-end tax planning

I know it’s hard to believe that it’s already time to start talking year-end tax planning, but it is.

If you’ve been thinking about legacy giving, one of the most tax-efficient ways to do it is to transfer appreciated stock.

The benefits are two-fold. If you transfer the appreciated stock to charity rather than selling it and donating the cash, you avoid capital gains taxes on the stock’s appreciated value. Also, if you itemize, you can receive an income tax deduction in the tax year that you make the gift.

Assume, for example, that Mary purchased stock two years ago for $15,000, and it is now worth $20,000. Mary makes a gift of this stock to the Catholic Community Foundation (CCF). She can deduct the full $20,000 value if she itemizes her taxes, plus she pays no capital gains tax on the $5,000 appreciation.

In order to be able to deduct the full fair market value of the stock in 2017, you must have owned the stock for at least one full year prior to making the gift. Secondly, the transfer must be made by Dec. 31.

Gifts of stock can be made outright for a parish, school or Catholic agency. In addition, you can give your stock to an existing endowment fund within the CCF (we manage more than 400 of them) for a preferred ministry, or establish a new endowment fund in memory of a loved one.

Moreover, you could use the stock to fund a charitable remainder trust. This financial vehicle allows you to receive the immediate tax benefits of your stock gift as well as provide a stream of income to you or a loved one for life or a period of years. Once the time limits are met, the trust’s balance is transferred to the ministry of your choice.

Funding your legacy giving by donating stock is an excellent way to reduce your taxes while helping further God’s kingdom.

As director of the CCF, I am pleased to help you connect your resources to Catholic ministries in need.

If you’d like to learn more about how you can make year-end stock gifts, feel free to reach out to me by e-mail at esmith@archindy.org or by phone at 1-800-382-9836, ext. 1427, or 317-236-1427. For instructions on donating stock to an archdiocesan parish, school or agency, please visit www.archindy.org/plannedgiving/stock.html.
 

(Elisa Smith is director of the archdiocesan Catholic Community Foundation. Tax information or legal information provided herein is not intended as tax or legal advice and cannot be relied on to avoid statutory penalties. Always check with your legal, tax and financial advisors before implementing any gift plan.) †