The Advantages of Donating Stocks/Securities...
Appreciated Stock as a Charitable Gift
One of the ways for a donor to give a gift to Mercy Foundation North, a 501(c)3 non-profit charitable organization, is to use appreciated stock. Giving stocks, bonds, and mutual fund shares that have increased in value (and which the donor has owned for more than one year) provides greater tax benefits to the donor than giving cash. Not only can the donor deduct the full market value of the securities but also avoid paying capital gains tax on the appreciation.
Instructions for Giving Stock to Mercy Foundation North
• Please inform the President of the Foundation that a donation of stock is being transferred (Call 530.247.3424). The donor’s name does not always appear on the stock transfer information, so please ask your broker to add your name in the subject line of the transfer so that we can identify you and thank you.
• Please also include in communication of your gift to the Foundation your intention for the use of funds.
• The donor’s broker should transfer the stock into the Foundation’s account. The stock will then be sold immediately.
| Account at: |
Morgan Stanley Smith Barney
310 Hemsted Drive, Suite 100
Redding, CA 96002
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| Account Representative: |
Michael E. Goethals
Senior Vice President, Financial Advisor
Morgan Stanley Smith Barney
Phone: 530.223.4200
Toll-Free: 800.733.6126
Fax: 530.223.2535
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| Electronic Transfer Info: |
DTC 0015 (These letters/numbers are needed for electronic transfers.) |
Considerations
• If a transfer to the Foundation’s brokerage account is not possible, the donor’s broker can become an agent for the Foundation and set up an account for the Foundation and sell the stock immediately.
• If a transfer using stock certificates is unavoidable, the donor should send unendorsed certificates by regular first class mail, along with a letter of transmittal signed by the owner to the President of the Foundation. Under separate cover, the donor should mail a signed stock power executed in blank for each security along with a copy of the letter of transmittal. The donor should not fill out the Foundation’s name as transferee on either the stock certificates or stock power.
• Securities that have decreased in value should first be sold by the donor and the cash proceeds given to the Foundation. The donor then can deduct the capital loss to offset any capital gain.
Gift Value
The gift value for Internal Revenue Service declaration will be the median of the high and low selling price of the stock or bond on the date ownership is transferred to the Foundation. After transfer to the Foundation, any increase in value will accrue to the Foundation; whereas a loss will be absorbed by the Foundation as a cost of doing business.
Proper tax and legal advice should always be obtained prior to any financial decision.
