Basic strategies that may improve the income tax benefit you receive for your year-end gifts.

Simply writing a check is often the easiest way to give. Certainly, it’s the most popular, and millions of Americans engage in the practice multiple times every year. You can probably receive a tax deduction for your gift (up to 50% of your adjusted gross income). You just need to get a receipt, and have a sufficient dollar amount of other deductions to itemize using Schedule A on your federal income tax return. So, gifting cash may be easy, but it’s not necessarily always the best option from a tax perspective.


1. Giving appreciated stock or mutual funds.


Donating stock may be a smarter approach. You may donate the stock directly to church, or you may sell the stock and donate the proceeds. It all depends on whether the stock has increased or decreased in value and how long you have owned the stock

If you own stock in a publicly-traded company that has appreciated in value, you can contribute shares of the stock to First Presbyterian Church of Orlando without selling it. Under Federal tax law, if you have held the stock for at least a year, you may be entitled to deduct the full value of the stock and never have to pay tax on the gain. This can be much more advantageous than selling the stock (which would create taxable gain) and donating the proceeds from the sale. The transfer would need to be completed by December 31 in order to qualify for a tax deduction this year.

You can donate appreciated securities – stock, mutual funds, bonds, ADRs (American Depository Receipts), and other ‘property’ – and oftentimes receive a greater tax benefit than you would receive as compared to selling the appreciated securities and then donating cash.

Make sure to check with a tax professional before initiating any transfer of securities. 

Please contact Tom Levesque, Director of Finance at 407.423.3441 if you are considering this kind of gift so that we can understand how you would like this gift to be utilized and send you a tax receipt in a timely manner. We are processing stock gifts through a new investment firm, so please confirm our current transfer instructions prior to making your gift.


2. Direct charitable IRA distribution.


Great news! The Charitable IRA rollover provision was made permanent in December 2015! You can now plan your IRA gifting strategy with confidence knowing that this tax advantage is in place.