What Are the Benefits of Donating Appreciated Assets?
What are the benefits of donating an appreciated asset, such as real estate or stock, instead of donating cash?
You can save on taxes by deducting the full value of the asset, while Emanate Health can receive the full benefit of the asset's current market value. You avoid paying taxes on the long-term capital gain in the asset.
- You bought stock for $10,000 thirty years ago and now it’s valued at $100,000.
- If you sold the stock and gave the proceeds to Emanate Health, you might pay capital gains taxes of $20,970 on the sale.
- As a result, you’d only have $79,030 to donate instead of the full $100,000.
But if you transfer ownership of the stock directly to Emanate Health:
- Then neither you nor Emanate Health will have to pay capital gains taxes.
- Emanate Health will receive the entire $100,000 gift.
- Meanwhile, you can deduct the full $100,000 value of the stock, not just the $10,000 you paid for it thirty years ago.