The past few years have been good for stock market investors. However, selling appreciated shares triggers capital gains tax on the appreciation in value. By transferring appreciated securities directly to the MUSC Foundation instead you can avoid the capital gains tax and receive an income tax deduction for the fair market value of the securities.

When you contribute assets that you have held for longer than one year and that have grown in value – for example stocks, stock, bonds or mutual funds – you receive a double tax benefit: there is no capital gains tax on the transfer and there is an income tax charitable deduction for the current fair market value of the securities. In essence you receive a tax break for appreciation on which you never paid taxes. These dual tax savings can dramatically reduce your cost of making a gift to support our mission through education, research and patient care.

This example illustrates the tax benefits when contributing appreciated assets:

Cash Gift vs. Stock Gift

*assumes donor itemized deductions

Usually, contributions of securities can be made easily via electronic transfer. However, be sure to direct that the securities themselves are transferred to the MUSC Foundation. If you allow your shares to be sold and the proceeds sent to charity you will trigger the capital gains tax.

And what if you like your current portfolio? You can still contribute appreciated shares and then use cash to replace them with shares you purchase today. In the end, your portfolio allocation will be unchanged, and your new shares have a higher cost basis with no taxable capital gain.

Note: If you own securities now worth less than you paid for them, you may wish to consider selling them and contributing from the cash proceeds. You’ll receive an income tax charitable deduction for your contribution as well as a capital loss deduction than can offset other capital gain income.