If you are fortunate enough to own a stock, bond or Mutual Fund that has experienced tremendous growth since you’ve bought it, then congratulations. And if you are thinking of making a gift or donation to the United Way of Kent County, then we thank you for your consideration. We have a solution for you that may help you save on your Capital Gains taxes.
Highly appreciated stock, Bonds or Mutual Funds held in a non-IRA or non-Qualified account can carry a hefty capital gains tax when you sell them. Depending on your income-tax bracket, you may owe either 15 or 20% on your gains. For example, let’s say you bought XYZ Stock at $10 per share a few years ago. Then XYZ company benefited from some good business years and now their stock is worth $100 per share. You have a profit of $90 per share owned. In the 15% Capital Gains bracket you could owe the Federal Government $13.50 per share you sell. If you owned and then sold 100 shares that can cause a $1,350 capital gains hit.
If you were going to donate to the United Way of Kent County and used a stock transfer instead, you do not owe the Capital Gains tax and you may collect the credit for donations at the same time. If you itemize on your taxes you still get the deduction for the amount of the actual donation (check with your tax advisor to see if you itemize and how much you need for a deduction) and you have made your donation to a worthy cause. (You may also save on your State income tax too.)
If you are considering this, contact your Financial Advisor or the United Way of Kent County and we can walk you through the simple process.
We ask that you fill out the Securities Gift Form and email it to us so we can keep track of who the gift came from. If you would like to leave stock to United Way in your will, you may fill out the Planned Gift Confidential Declaration of Intent form.