Giving Tuesday: Why You Should Give Non-Cash Charitable Donations and Maximize Your Tax Benefits

Giving Tuesday is a great time to make a difference in your community and support your favorite causes by making charitable donations. Donating cash is a simple way to support charities, but there are other ways you can give. Did you know you can donate appreciated assets directly to charities? It can increase the impact of charitable giving and maximize your tax benefits.

Benefits of Non-Cash Donations

When you donate non-cash assets to a charity, such as appreciated stock that you have held for more than a year, the full fair market value is tax deductible and there’s no capital gains tax. If you have held it for less than a year, your deduction is limited to your cost basis. If you sell the assets first and donate the cash proceeds instead, it will trigger capital gains liability. This means you can donate up to 20% more to your favorite charities, and that creates a much bigger impact than just donating the cash from the sale.

To obtain a deduction for 2019 tax year, the transfer must be completed by December 31. Be sure to start the process early so there is enough time to complete the transfer before the deadline.

Types of Non-Cash Charitable Donations

Long-term appreciated securities:

  • Publicly traded stocks
  • Mutual fund shares
  • Bonds

Privately held business interests:

  • Private company C-corp and S-corp stock
  • LLC and Limited Partnership interests
  • Private equity
  • Hedge fund interests
  • Pre-IPO shares

Other assets:

  • Restricted stock
  • Life insurance
  • Cryptocurrencies
  • Retirement assets
  • Oil and gas royalty interests
  • Real estate

Do you need help maximizing your tax benefits? Contact us to discuss your specific tax needs.