When you make charitable contributions, you can give more by donating appreciated stock instead of cash. If you sell $1,000 worth of appreciated stock you will have to pay the capital gains tax of 15 percent. If most of the stock’s value is appreciation, the amount of the tax approaches $150, leaving only $850 for charitable giving.
Instead, you can give the stock directly to charity and take a full $1,000 tax deduction. The charity will not have to pay any taxes when it sells the stock. You wind up saving as much as $150 in capital gains taxes while the gift itself reduces your income tax bill. Here’s what you need to do:
Decide which stocks or fund shares you wish to give to each charity on your list.
Call the charities ask for their “stock liquidation brokerage account.”
Draft a letter to your brokerage firm or fund company, asking that a certain number of shares be transferred from your brokerage account into the charity’s stock liquidation account.
You can fax these instructions directly and then send the original by mail.