A donation of stock can result in a tax deduction on the fair market value of the investment and do so without incurring taxes on the capital gain or net investment income. Stock gifts can be done by electronic transfer, with New Life Community Church giving proper credit for your contribution.
If you are interested in making a stock gift, please contact Kristin at email@example.com or call 562-924-4466, ext 208.
Here’s an example of how a stock donation works.
Let’s say you bought 100 shares of XYZ stock or mutual fund shares in 1999 for $1,000. The value of your investment today is $3,000. You decide to donate the 100 shares of XYZ stock to NLCC. The church receives the shares and can sell them, thereby creating $3,000 to support the ministries of the church. You receive tax credit for a donation of $3,000 in computing your annual taxes. Your $3,000 donation originally cost you $1,000.
Now, let’s look at the old way we made donations to charities and churches. You sell your 100 shares of XYZ stock for $3,000 to raise cash for daily living and to make donations. Next, you donate the $3,000. In completing your annual taxes you get a $3,000 credit for your donation. The church receives $3,000. However, in computing your taxes, you now must deal with $2,000 in taxable capital gains from the sale of the stock!
By giving stock shares directly to the church, you avoid paying taxes on capital gains and the church, being tax exempt, does not pay taxes on the donation.