​Donations of Appreciated Securities

Case Study

​​​​We thought you might appreciate this case study that illustrates the potential benefits of donating appreciated securities as a year-end charitable contribution:  ​How to make a $5,000 charitable contribution for only $2,200 after tax savings ... and send a child to preschool

Example:

​You have $5,000 of XYZ Security. You bought it for $2,500 over 12 months ago

​What happens in this example when you sell your security?

  • You will pay a total of 32.8% in taxes on your long term capital gain*: $820
  • You will miss out on a charitable tax deduction savings**: $1,980
​*Long Term Capital Gain is calculated for the top income bracket including 9% NJ State Tax and 3.8% Net Investment Income Tax
**Federal Charitable Tax Deduction savings is calculated based on a Married Couple Filing Jointly in the 39.6% tax bracket

​What happens in this example when you donate your security to Preschool Advantage?

  • You send a Morris County child to preschool for a full year
  • In 2016, you may be able to save $820 in Long Term Capital Gains Taxes 
  • You may receive as much as $1,980 as a Charitable Tax Deduction  
  • You may have qualified to make a $5,000 Charitable Contribution for only $2,200 after savings*Long Term Capital Gain is calculated for the top income bracket including 9% NJ State Tax and 3.8% Net Investment Income Tax
​For information about making a contribution of securities to Preschool Advantage, please contact Anneke Demarest, Director of Development, at 973-532-2501 or email development@preschooladvantage.org.
​Disclaimer: This is an oversimplified example of Long Term Capital Gain and Charitable Tax Deduction, with tax rates used assuming the donor is a top-earning NJ resident in 2016.  If you are thinking of making a charitable contribution with stock, please contact your financial advisor and accountant for advice. You should not use this illustration alone to make a charitable contribution decision.