![]() That way you'll only be taxed on future appreciation. Then use your $10,000 of cash to buy the shares back in the open market. If you don't really want to part with the stock because you think it's still a good investment, give it away anyway. Making your gift with stock instead of cash saves you that $1,350. You eliminate the tax you'd owe if you sold the stock for $10,000: Such a sale would trigger a capital gains tax on the $9,000 of profit, and that would cost you $1,350.The college still gets $10,000 (it won't owe any tax on the profit when it sells the stock.).If instead, you give the $10,000 worth of stock, If you write a check for $10,000, the college gets $10,000, and you get to deduct $10,000. Let's say you own stock that you bought many years ago for $1,000 that is now worth $10,000, and that you intend to make a $10,000 gift to a major fundraiser for your alma mater. For property held one year or less, IRS only allows you to claim a deduction on the price you paid for it.If you have owned the property more than a year, you can deduct its full fair market value and escape income tax on the appreciation.There's also a special rule for folks who donate to colleges and universities and receive the right to buy tickets to school athletic events: They can deduct 80 percent of their donation.Ĭash may be king, but if you want a really big tax saver, your best bet may be a donation of appreciated property-securities, real estate, art, jewelry or antiques. For donations of more than $75, the nonprofit must give you a written statement telling you the value of what you received in return and reminding you that you can't deduct that portion of your contribution.$50 donation - $20 return = $30 deduction.If you buy a $50 ticket to a fundraising dinner at a church, but the cost of the dinner is $20, you can deduct $30.If these restrictions limit your write-off in the year of the gift, the excess deduction carries over to the next year.Īlso, keep in mind that you can't write off a contribution to the extent that you get something in return.When it comes to gifts of appreciated property, the limit drops to 30 percent of AGI. The caps are a bit lower for gifts to other types of nonprofits.The basic rule is that your contributions to qualified public charities, colleges and religious groups generally can't exceed 60 percent of your Adjusted Gross Income (AGI) (100% of AGI in 2020 for qualified charities). ![]() There's also a limit on how much you can deduct. This site allows you to enter an organization's name and location to instantly find out if it qualifies. ![]() If you're not sure whether the group you want to help is approved by the IRS to receive tax-deductible donations, check online at IRS Exempt Organizations Select Check.Most often, these are charitable, religious or educational organizations, though they can also be everything from your local volunteer fire company to a group for the prevention of cruelty to animals. ![]() In order for your donation to be deductible, it must go to a nonprofit group that is approved by the IRS. You can only deduct out-of-pocket expenses, including the miles you drive, parking fees, tolls, materials, and supplies.
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