Many people want to do more to help the animals, but need their income to meet current expenses. Contributing appreciated property is one way to make a larger gift for a smaller out-of-pocket expense, and in some cases, with a gain in income. Contributions of appreciated property can benefit you and the animals greatly. Here are two examples of how it can work.
Appreciated securities can be a great way to make a charitable gift. In most cases, if you have held securities for more than one year, you can deduct the market value of the securities—and avoid paying any capital gains tax. Appreciated securities also are often used to fund other types of lifetime gifts, which are described in our planned giving section. Contributing stock allows many people to make a larger contribution for less out of pocket expense.
Example: Robert owns 100 shares of XYZtech Corp stock that he purchased 3 years ago for $15 a share. Today, the shares are worth $85 each. While it has been a good investment, Robert decides to make a gift of 10 shares of XYZtech to the Maryland SPCA, Inc. His out-of-pocket cost is $150 for the shares three years ago, yet he is able to take a deduction for $850—the value of the shares today. Because Robert is in the 28 percent tax bracket, he gets a deduction of $238 for the stock—$88 more than the cost of the stock originally!
Real estate, whether developed or not, can have attractive benefits when donated. Perhaps you have a vacation home that you no longer use or purchased a piece of property that you once intended to build on but have now changed your mind. Or, you may have inherited property that you have no need for and are not interested in maintaining. Donating real estate to the Maryland SPCA has many benefits, similar to those of appreciated securities. And, as with appreciated securities, the property can be donated without incurring any capital gains tax, and you receive a tax deduction for the full market value.
Example: Katherine inherited a house out of state when a relative died. The property had appreciated considerably—from its $18,000 purchase price in the 1940s to an appraised value of $210,000 today. Because Katherine doesn’t want the house—and doesn’t need the proceeds from selling it—she donates it to the Maryland SPCA, Inc. and receives a tax deduction for $210,000. If she did need the proceeds, she could also consider establishing a charitable remainder trust or charitable gift annuity, which would provide her income for life.
The examples are only only illustrations of the benefits. We recommend that you consult your financial advisor. The Maryland SPCA can provide more information tailored to your circumstances at no cost or obligation. We also offer a securities and real estate (appreciated property) brochure.
Our legal name is Maryland SPCA, Inc. Our Federal tax identification number is 52-6001558.
To donate stocks or real estate, contact Emily Finton, Development Services Coordinator, at email@example.com or 410-235-8826 ext. 135.
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