Interested in making a stock gift?
Your stocks might get pulses racing on Wall Street, but here at the Connecticut Humane Society, they keep hearts beating, tails wagging and purrs rumbling. Donating stock to the pets has never been quicker or easier, thanks to CHS’ partnership with Overflow. Or, email firstname.lastname@example.org to get information to forward to your broker.
A gift of appreciated securities held for more than one year may provide significant benefits to you as a contributor, benefits which may include:
- a charitable tax deduction
- eliminating a capital gains tax
- claiming a loss from a stock sale
- helping you reduce your income or estate taxes
Securities are most often used to support CHS’ work in the form of:
An outright gift. When you donate securities to CHS, you receive the same income tax savings that you would if you wrote CHS a check, but with the added benefit of eliminating capital gains taxes on the transfer, which can be as high as 20 percent. Consult your financial planner or tax adviser for assistance in evaluating the tax advantages which might be available to you.
A transfer on death (TOD) account.* By placing a TOD designation on your brokerage or investment account, that account will be paid over to one or more persons or charities after your lifetime. Note that state laws govern payable on death accounts. Please consult with your bank representative or investment advisor if you are considering this gift.
The FAQs of Donating Stock
Who is Overflow?
Overflow is a digital solution for donating non-cash assets, enabling donors to give in the most tax-efficient way. Donors can experience the ease of giving via stock or crypto in less than 5 minutes from their mobile device. Overflow also provides givers access to a private Donor Portal which enables visibility into gift history, transaction statuses, and the ability to update connected financial accounts.
Is giving through Overflow safe and secure?
Overflow’s Information Security Program follows the criteria set forth by the SOC 2 Framework, a widely respected information security auditing procedure. Overflow does not have access to nor store any brokerage account usernames or passwords. They use Yodlee, a third party provider, that handles the brokerage login process. Over 600 companies including PayPal, Mint, and Amazon use Yodlee to connect their clients’ accounts.
What is the tax benefit of donating appreciated stock?
Donating appreciated stock that you’ve held for over a year can allow you to deduct the full fair market value from your taxes AND protect your realized gains from being subjected to long-term capital gains tax, which can be up to 37% depending on your tax bracket. Nonprofits are exempt from capital gains taxes, so your stock donation allows the nonprofit to utilize the full amount of the donated funds.
What specific stock could I donate?
You can give any publicly traded stock through Overflow. By donating assets that have appreciated in value for more than one year, you are more likely to get the highest tax benefits.
Can I give through my 401K or IRA?
Overflow can process all whole shares of publicly traded stock, including 401Ksand IRAs. However, because donors often incur penalties for withdrawing these assets before a certain date, we highly recommend consulting your tax professional before donating these types of assets. Donating 401Ks or IRA could result in major tax penalties or even fewer tax benefits than donating cash.
Can I give company stock outside of the trading window?
If you received company-distributed stock as an employee and the trading window is not open, your brokerage will likely reject the transfer request. We suggest you ask your company for the trading windows and give during those time periods, which typically are open quarterly for 3 to 4 weeks at a time.
How do I claim my charitable tax deduction?
File Form 8283 for the 1040 tax return. To calculate how much to deduct from your taxes, the general rule of thumb is to deduct the
fair market value which is the average of the high/low price of the stock on the day it was received by the nonprofit. This is for assets you’ve held for more than a year. The date the stock was received by the nonprofit can be found in the acknowledgment letter you receive from the nonprofit. Include this letter in your tax return.