Donations to charity from taxable account
Posted: Mon Jun 18, 2012 6:22 pm
Last year I donated some PRPFX (bought in 2009) from my brokerage account to the charity. The charity didn't have a brokerage account so on my recommendation they opened one at Fidelity. The process was rather simple and I intend to use it in the future instead of donating cash. The cool thing is I don't have to worry about "wash sale" - because the shares are transferred, not sold, I can buy the same fund right on the day of a transfer (or close to it) with new money and effectively eliminate any unrealized gains.
I wonder if anybody else has ever donated stocks/mutual funds. In my opinion this works if one's donations are mostly intended for a specific charity and the shares have appreciated at least moderately. Also, for those who don't have large deductions each year a smart way of doing this is bundling your donations every two years: in year 1 you donate 2x of your planned annual contribution and itemize on your taxes, the next year you just take standard deduction.
I like to think about this way of donation as "giving more with less": if one had to sell the shares in order to give cash they would be hit with a capital gains tax and therefore might have to give less than they planned.
I wonder if anybody else has ever donated stocks/mutual funds. In my opinion this works if one's donations are mostly intended for a specific charity and the shares have appreciated at least moderately. Also, for those who don't have large deductions each year a smart way of doing this is bundling your donations every two years: in year 1 you donate 2x of your planned annual contribution and itemize on your taxes, the next year you just take standard deduction.
I like to think about this way of donation as "giving more with less": if one had to sell the shares in order to give cash they would be hit with a capital gains tax and therefore might have to give less than they planned.