Giving back to the community and the less fortunate is something that all people should try to do on a regular basis. When you are going to donate to a charity, the most common option considered is to donate cash. While this will be valued by a charity, another option to consider would be to donate stock instead. There are several reasons why donating stock could be a better option for both the charities and the donors.
Helps to Avoid and Reduce Your Taxes
A primary advantage of donating stock versus cash is that it can help you to avoid taxes. When you sell a stock and use the proceeds to donate to a charity, you are going to pay capital gains on the stock sale. If you were to donate the stock directly, you can avoid having to pay this. Further, you can still deduct the value of the stock off of your tax bill at the end of the year.
Allows You to Give More
Additionally, you can also give more money to a charity when you donate a share of stock. Since you can avoid the taxation that comes with selling stock, you will have more money that can be given back to the charity. Additionally, you will be able to donate an asset that should appreciate in value and pay dividends in the future to the charity.
If you are planning for your financial future, you should try to get the advice from seasoned professionals. One company that can provide you with amazing support and service is HCR Wealth Advisors. The team at HCR Wealth Advisors can work with you to determine your long-term financial goals and then create a plan that will help you to get there. This can also include figuring out the best way to donate and give back while maximizing donations and minimizing your tax burden.
This article is provided for informational purposes only and should not be interpreted as investment advice.