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DISCOVER THE BENEFITS OF GIVING WISELY



The Benefits of Giving Stock | 01-Dec-2015

Giving appreciated securities, including stocks or bonds, is an easy way for you to make a Charitable Donation. Here are some of the potential benefits:

  •     Avoid paying capital gains tax.
  •     Receive a charitable income tax deduction for the full fair maket value of the securities.
  •     Benefit our Community!

What are the benefits of giving securities?

Donating securities that have increased in value is a tax-savvy plan and helps support our community. Gifts of securities to the Jewish Foundation may be used in many ways:

to establish or add to a designated endowment fund or donor advised fund; to benefit the Jewish Federation Annual Campaign; or to make an outright or capital gift or to create an endowment for your synagogue or another charitable organization.  You can also use appreciated securities to establish a charitable gift annuity or charitable trust that pays you an income for life.

Gifts of appreciated securities that you have held for longer than 12 months offer a two-fold tax savings:

  • If you itemize your deductions, you may receive a charitable income tax deduction for the full fair market value of the securities on the date of the gift.
  • You do not pay capital gains tax on the increase in the value of the securities. For example, if the securities originally cost $2,000 and now have a fair market value of $10,000, you do not pay tax on the $8,000 gain. This is especially advantageous now that the capital gains rate (for some taxpayers) has increased.   

How do gifts of cash and securities compare?

 

 Gift of $10,000 Cash
Gift of $10,000 Securities

 Gift Amount

$10,000 $10,000
Initial Cost Basis of
Securities/Appreciation
 Not applicable
$2,000/$8,000
Capital Gains Tax Saved or Paid,
Assuming 15% rate*
Not applicable $1,200
Ordinary income tax savings
(35% tax bracket x value of gift)*
$3,500 $3,500
Net tax savings
(ordinary income + capital gain)
 $3,500  $4,700

*Please note: A different tax rate may apply to you and, accordingly, the charitable benefit you receive may vary. The illustration used is for educational purposes only. Please consult with your own legal, tax and financial advisors to determine your specific situation. The 15% capital gains tax rate applies to taxpayers earning less than $400,000/$450,000. Those earning more than the threshold will pay a 20% rate.

CLICK HERE FOR A CASH vs. STOCK GIFT CALCULATOR TO PROVIDE OTHER EXAMPLES.


How does it work?

  • If your broker holds your securities, instruct your broker to electronically transfer the securities to the Jewish Foundation of Greater New Haven. The gift is considered complete on the date the securities are transferred and received into the account of the Foundation. To do this, contact the Foundation Director, Lisa Stanger, at 203-387-2424, ext. 382 or lstanger@jewishnewhaven.org
  • If you hold the securities, send or deliver the unendorsed stock/bond certificate and a signed stock power to the Jewish Foundation in separate envelopes. The gift is considered complete on the date when both items are postmarked or hand-delivered to the Jewish Foundation.
  • You may receive an income tax deduction for the full fair market value of the securities on the date the gift of securities is complete.
  • The fair market value, for tax purposes, is the average of the high and low trading prices of the securities on the date the gift is complete.
  • Gifts of securities may be deductible up to 30% of your adjusted gross income. Excess deductible amounts may be carried forward for five years.

For Additional Information about giving appreciated securities click here

or contact the Foundation Director, Lisa Stanger, at 203-387-2424, ext. 382 or lstanger@jewishnewhaven.org.  All inquiries are confidential.

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