By: Richard Carnes
Many individuals are reviewing their charitable contributions at the year end and considering how they could provide additional gifts to their church and ministry causes. Perhaps you would like to make gifts above what you give out of income as tithes and offerings to provide on-going support to additional Baptist causes.
One such way to achieve this giving is to use assets that have appreciated in value for making “above and beyond” gifts to support the Christian ministries that are important to you. If you have investment securities you have owned for more than a year that are worth more than the security cost, consider using this asset to make gifts.
Your deduction will actually be based on the full value of the security. In addition, you will not owe capital gains tax that would normally be due on a sale of the security.
Using an appreciated asset to make a gift to your church or other Baptist cause can result in a lower after-tax cost to make your gift than if you use the same amount of cash to make the donation. Savings from the charitable deduction and the bypass of capital gains can be considerable. How much you save depends on your actual income and capital gains tax rates.
If you own investment securities that are now worth less than they cost, consider selling the security and give the cash proceeds. When you are able to deduct the amount of the loss as well as the gift amount, your deductions may well total more than the current value of the investment.
The process of making gifts of appreciated securities need not be complicated. If your financial advisor holds the securities for your account, instruct that the security be electronically transferred to the financial account of the designated charity. This is often the most convenient way of making your gift.
When giving securities, including mutual funds, bonds, notes or mortgages, specific advice and instructions should be obtained from your financial advisor. Additional time should be allowed for completion of such gift transactions.
The Kentucky Baptist Foundation staff is honored to work with individuals seeking how best to make gifts of appreciated assets to their church and other Baptist causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.
Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.