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Smart Move - Donating Stock

MoneyWise

Christian talk radio with Rob West

May 18, 2021

2 Corinthians 9 tells us, "Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver." And He probably also appreciates a smart giver. Christians are commanded to be generous toward God’s Kingdom and there’s no wrong way to do it. But some ways may be better than others. We’ll talk about one of those ways today on MoneyWise. We’re discussing donating stocks. We had a caller on the program recently who wanted to donate some of his investments to MoneyWise and asked how to do it. Take advantage of this kind of giving to your church or favorite ministries. It’s sometimes a smarter way to give than by simply writing checks because it enables you to be even more generous. When you do that, you’re multiplying the impact of your giving because you eliminate capital gains tax on the stock you donate. That increases your giving capacity. And if you still like the stock you donated, you can use your increased cash flow to repurchase it. Let’s compare traditional giving to donating stock using a figure of $10,000. With traditional giving, you would start with that $10,000 in cash. You write checks to your church and other ministries for that amount. That obviously qualifies you for a $10,000 charitable deduction. You have to keep track of every tax receipt and you also continue to pay (at some point) capital gains tax on the sale of stocks in your portfolio. But now let’s say, instead of cash, you donate $10,000 worth of appreciated stock into your NCF Giving Fund. NCF then sells those stocks tax-free to you and puts the proceeds into your Giving Fund to be distributed to charities. You still have the $10,000 in cash you didn’t donate, which you can then use to reset the basis in your portfolio. You can use your tax savings to be even more generous. But there are even more advantages to donating stock through an NCF giving-fund. The first one you might call "deduct now, grant later." You can get a tax deduction this year for the full amount of your donated stock while granting it over several years. You can do this all online. You can sign in to your Giving Fund on NCF’s website from any device to see your fund balance, make gifts, and recommend grants to your favorite charities. So, as you can see, this really takes your giving to a whole new level. It enables you to set your giving goals across multiple years instead of just what you want to give now. This is something you’ll want to discuss with your financial advisor. Although that person is managing your portfolio, they may not really be aware of your giving goals. By sharing this with them, they can help you to select the best stocks or funds to donate. Download from National Christian Foundation, "Stock giving: A smarter way to make an impact." On today’s program we also answer your questions: --I have an amortized loan but am confused as to the percentages on the interest rate. --I’ve saved money for my great-grandson’s college. I also have some coins that are of value. Where do I go to get these coins appraised to sell? --We want to put $100 a month into a custodial IRA for my 3-year-old. That way, when she’s in her 20's, she can use that money any way she wishes. What are your thoughts? --I want to give somebody money to help them pay off their house and need to be sure I’m doing this correctly. Do I need to call the lender myself? What are the necessary details that I need to iron out to do this? --I’m young and want to know the best way to start saving for retirement. Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected] Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, purchase books, and even download free, helpful resources like the free MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab on our website or in our app.

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