A gift of stock may be more tax-wise than a cash gift. As stocks grow in value, they may appreciate substantially beyond the original investment. When the stocks are sold, any growth above the original cost is considered a capital gain and is subject to federal capital gains tax of up to 20 percent (15 percent federal rate and many states treat capital gains as ordinary income). By giving Young Life appreciated securities (that have been held at least a year and a day), you can avoid the capital gains tax and receive an income tax deduction for the fair market value of the stock at the time of the gift.
Mr. Smith owns stock with a current value of $100,000. He originally paid $20,000 for the stock (his "cost basis" for the stock). This means when he sells the stock, he may pay a 20 percent (state and federal combined rate for example purposes) capital gains tax on the appreciation ($80,000 in appreciation x 20 percent capital gains tax = $16,000). By giving the stock to Young Life rather than giving cash, he not only will receive an income tax deduction for the fair market value of the stock on the day of the gift, he also will avoid the $16,000 in capital gains taxes.
||$100,000 current value|
|Capital gains tax avoided
| by making gift (assuming
| 20 percent capital gains tax)
|Current charitable tax deduction
How to Give Stock to Young Life
Advise Young Life of the Gift
Please contact our Stock Accountant with the designation (how you want your gift to be used) for the stock gift, the number of shares and the identity of the stock. We prefer that this be done in writing, but you can call the Stock Accountant directly at (719) 381-1979; send a fax to (719) 381-1740 or e-mail firstname.lastname@example.org
. To ensure efficient processing of the gift, it is very important to provide the information above. Please do not rely on your stock broker or wire transfer service to provide us with this information.
- If your shares are held in an account ...
Ask your broker to make an electronic transfer of the shares to Young Life's Merrill Lynch Colorado Springs account #428-04A61. The DTC number is 5198, and it is needed if the stock is currently in an account with a company other than Merrill Lynch. Once the stock is transferred into Young Life's account, we will receive notification of the transfer, and a receipt will be sent to you. The effective date of the gift for this method is the date the shares are placed into our account. Please contact the Young Life Stock Accountant at (719) 381-1979 or e-mail email@example.com to advise us that the gift has been made.
- If you hold the certificate for your shares ...
Please sign the stock over to Young Life, either by endorsing the back of the certificate or by using the stock power. Please make sure to sign exactly how the name(s) appear on the front of the certificate. If you have already had the certificate reissued in the name of Young Life, it is not necessary to provide us with a stock power. Both types should then be mailed to the attention of the Stock Accountant at the Young Life Service Center, 420 N. Cascade Avenue, Colorado Springs, CO 80903. Due to the nature of the document being mailed, we recommend that you send it via certified/registered/express mail. When the certificate is received, it will be immediately liquidated and a receipt will be sent to you. The effective date of the gift made in this manner is the date of the postmark for certificates still registered to the donor, and the certificate date for those that have been reissued in the name of Young Life.
- If you are transferring shares of a mutual fund ...
Please contact the Stock Accountant to discuss how to initiate the transfer. Because each mutual fund company has its own unique procedures, we will need to contact your mutual fund company or your broker to coordinate the most efficient way to make the transfer.