Capital Gains Advantages
The advantages of establishing an ABE Charitable Gift Account with $50,000 in appreciated stock.
|Selling the stock and donating the proceeds directly to charity||Donating Stock to the ABE Charitable Gift Fund|
|Donor's capital gains tax1||$8,000||$0|
|Value of gift to charity||$42,000||$50,000|
|Tax savings for Donor2||($15,120)||($18,000)|
|Donor's "cost" of donation||$34,880||$32,000|
1Assumes purchase price of stock was $10,000 and a capital gains tax rate of 20 percent.
2Assumes individual income tax rate of 36 percent. Does not reflect effects of certain tax limitations, such as alternative minimum tax, state or local taxes, adjusted gross income limitations, or the limitation on itemized deductions.