Non Profits: Inform Your Supporters About Tax Saving Strategies
July 21, 2014 by Stephanie Potash
Many Non Profits depend on the generosity of their supporters to continue their important day to day missions and outreach. One way a Non Profit can encourage more contributions is by informing your supporters about the benefits of giving appreciated stock to your organization.
Let’s say that a contributor is interested in donating $10,000. In return, of course, the person will receive a charitable deduction based on his or her tax bracket. But what if the contributor sold $10,000 worth of stock — purchased one or more years ago for $2,000? After the sale, the supporter wrote a check for $10,000 to your organization.
The result for your not-for-profit is the same, but it is very different for the individual who sold stock to make a contribution. The donor is going to have to report a capital gain of $8,000 and generally pay a federal capital gains tax of 15 percent* ($1,200), as well as state tax. By giving stock, the donor would be exempt from paying capital gains tax.
*Note: The maximum rate for higher – income individuals is now 20 percent. This change only affects singles with taxable income above $400,000, married joint-filing couples with income above $450,000, heads of households with income above $425,000, and married individuals who file separate returns with income above $225,000.
Our non profit team is here to help you. For more information please call us at 248 952 0200.
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