Gifts of Stocks, Mutual Funds or Real Estate

What about non-cash gifts?

While gifts of cash are easy and the most common form of a charitable gift, increased tax savings can often be achieved by transferring appreciated assets to a church or Christian ministry to fulfill giving plans.

The Need

A donor wants to make a gift to their church or a Christian ministry. To make the gift, the donor is considering selling an asset they own, such as a stock or mutual fund investment or real estate. The asset the donor may sell has appreciated in value and will produce capital gains income when it is sold causing the donor to incur capital gain taxes.  Is there a better way to make the gift?

The Solution

Donor transfers ownership of the appreciated asset to the ministry and the ministry then sells it. Since the ministry is a tax-exempt charitable organization, no capital gain taxes are incurred.

The Benefits

Tax Deduction - Donor receives a federal income tax deduction based upon the full fair market value of the stock, mutual fund, or real estate gifted to their church or Christian ministries.

No Capital Gain Taxes – The ministry sells the appreciated asset and receives cash proceeds without any reduction in value due to capital gain taxes.

The Details

Timing the Gift Transfer – For the donor to avoid recognition of capital gains when the appreciated asset is sold, ownership of the stock, mutual fund, or real estate must be transferred to the ministry before a sale is arranged.

Assistance with the Gift Transfer and Sale - The documentation needed to complete the transfer from donor to charity varies from one type of asset to another. If the church or Christian ministries the donor wishes to benefit are not organized to receive and administer these gifts, MBF is available to do so on behalf of ministry.

Substantiating the Charitable Deduction – In claiming a charitable deduction for the gift of stock, mutual funds, or real estate, the donor will need to include a Form 8283 with their income tax filing.  The fair market value of a real estate gift will need to be substantiated by a qualified independent appraisal.