Use a gift before year-end to offset a large tax bill
Carol: Years ago, I inherited stock from my grandmother. Earlier this year, we decided to sell some of the stock. After we sold the stock, our CPA told us we would need to pay capital gains of $120,000 from the sale.
Gary: That came as a shock. We discussed ways we could offset the capital gains tax bill with our CPA. Our CPA advised us that if we donated some of the remaining stock before the end of the year, we would receive a charitable deduction that would offset the capital gains tax on the stock we sold.
Carol: We transferred $80,000 in stock directly to Oakland Symphony.
We received two benefits. First, we avoided a large capital gains tax on the stock we donated. Second, we received a charitable deduction. The tax deduction offset all of the capital gains from the stock sale.
Gary: That came as a shock. We discussed ways we could offset the capital gains tax bill with our CPA. Our CPA advised us that if we donated some of the remaining stock before the end of the year, we would receive a charitable deduction that would offset the capital gains tax on the stock we sold.
Carol: We transferred $80,000 in stock directly to Oakland Symphony.
We received two benefits. First, we avoided a large capital gains tax on the stock we donated. Second, we received a charitable deduction. The tax deduction offset all of the capital gains from the stock sale.
Is making a gift before year-end a good strategy for you?
Making year-end charitable gifts, especially with highly appreciated property such as real estate and stocks, can be an excellent strategy to reduce your tax bill.
Please contact us if you think you have assets that would make a nice gift to charity.
Your benefits may be different. Click here to view an example of your benefits.