Gifts of Appreciated Assets

There are ways of making a contribution other than by a simple gift of cash. For example, your assets may include appreciated securities. If sold, a substantial portion of proceeds would have to be paid in taxes. But a gift of appreciated assets to PRASAD, owned by you for more than one year, would qualify for a charitable contribution deduction equal to the full fair market value of the assets. Your gift could then be sold by PRASAD, and since PRASAD is a not-for-profit organization, the appreciation would not be taxed. In this way, more of your gift can be used in the manner you had intended.

Example: Mrs. Smith purchased 100 shares of stock 12 months ago for $5,000. The stock is now worth $20,000. She would like to use this stock to make a gift to The PRASAD Project. If she first sells the stock, pays her tax liability, and then donates the proceeds to PRASAD, her gift and the resulting charitable deduction may only be $16,000 rather than $20,000. This is because if she sells first, a capital gains tax of $4,000 will have to be paid by her (on the gain of $15,000 at a 20 percent capital gain tax rate).

A better solution is to simply donate the stock to The PRASAD Project. Her deduction would be $20,000 and PRASAD could receive an additional $4,000 for its humanitarian purposes. (Your accountant, financial advisor or a planned giving advisor can supply information on how to make this type of gift.)

Consult with your financial planner, accountant and/or attorney to determine which categories best fit your individual and family situation.