Securities can make great gifts
The bull market of 2012 raises an intriguing question for those with investments: What is the most beneficial gift I can donate to the Minnesota Medical Foundation? In terms of taxes, the answer is securities that 1) have gone up in value and 2) have been owned for more than one year.
Supporters who give highly appreciated stocks receive a double tax benefit that enables them to magnify the impact of their generosity: They can deduct the full fair market value of their investment — not just what they paid originally — and they save again by avoiding all capital gains taxes on their “paper profit.”
Take the example of Mrs. Jones. The stock she purchased in 1995 for $200 is now worth $1,000. If Mrs. Jones gives the stock instead of cash, the Minnesota Medical Foundation receives a gift of $1,000 — the fair market value of the stock — and she can claim a $1,000 charitable deduction on her next income tax return.
In the 33 percent bracket, that’s a tax savings of $330. Furthermore, she avoids $120 in capital gains taxes that would be due whenever she sold the stock. The result: After figuring her tax savings, a gift of $1,000 costs Mrs. Jones only $550.
Mutual fund shares can be given to the foundation with the same beneficial effect as listed and actively traded stock. Your deduction is the “net asset value” of the shares, which is calculated each day, generally after the close of the stock market. If you decide to contribute mutual fund shares, please notify us as soon as possible and send us a copy of your mutual fund statement. Transfers can take from two to six weeks to complete, and we will need to work with you and your account manager to make the gift effective for the current year.
To find out how you can make a planned gift that supports medical and health-related research, education, and care at the University of Minnesota, please contact the Minnesota Medical Foundation’s planned giving team at 612-625-1440, 800-922-1663, or firstname.lastname@example.org.