Stock Gifts

Publicly Traded Securities

A gift to Scouting of stocks or bonds may provide you with even greater tax benefits than a cash gift of equal value. This is especially true for securities that have appreciated in value and could generate capital gains tax if sold.

Many donors make gifts of appreciated securities because they can avoid paying capital gains tax on them, and take a charitable deduction for the full market value of the securities (if owned for at least one year). But we suggest not donating securities worth less than you paid for them. It may be better to sell the stock, report your loss for tax purposes, then donate the cash proceeds.

Securities held less than one year may be donated, but your charitable tax deduction will be limited to your cost basis. Though there may be advantages to giving short-term property with little or no appreciation (see below), you should discuss this with your own tax adviser.

Gifts of stock you have owned for more than a year are deductible up to 30% of your adjusted gross income (AGI) every year. If held for less than a year, they are deductible up to 50% of your AGI every year. Excess deductions may be carried over for five years after the year of gift.

Closely Held Stock

Often very highly appreciated in value (and expensive to sell), gifts of closely held stock offer the same tax advantages as a gift of common stock. In fact, some donors use these gifts as a way of either transferring ownership interests to others such as family members, or regaining control of the shares and establishing a new cost basis for the stock.

Though the advantages of closely held stock gifts are similar to those of publicly traded stock gifts, an appraisal may be required to establish the market value of these shares. Please consult your tax adviser.

Stock Options

A gift of stock options can be just as valuable to a local council as a gift of the stock itself. It is also a painless way to make a gift; you’re giving away something you don’t actually own yet. These gifts will not produce an immediate tax deduction, since the value of the gift cannot be determined until the option is exercised by Scouting. But when the option is exercised, you are entitled to a tax deduction equal to the difference between the option price and the stock value.

Transferring Stock

Please contact us for wire transfer instructions and to let us know that you are making a transfer and security name so that it can be identified. For more information on how to make a stock gift, please contact Devon Dougherty at 714-546-8558 x145 or devond@ocbsa.org.