1. Giving appreciated stock you’ve held for more than a year is better than giving cash. 



If you donate stock that has increased in value since you bought it more than a year ago – and if you itemize deductions — you can take a charitable deduction for the stock’s fair market value on the day you give it away. You’ll also avoid capital-gains taxes on the increase in value over time, which you would have had to pay if you sold the stock and then gave the charity the cash proceeds. You can deduct the fair market value only if you hold the stock for more than a year before giving it away. If you’ve held it for less than a year, your deduction is limited to your cost basis — what you paid for the stock — not the current value.

2. If it’s a losing stock, it’s better to sell it and give the cash. 

If the stock has lost value, it’s better to sell the stock first and then give the cash to the charity. You’ll still be able to deduct your charitable donation if you itemize, but you’ll also be able to take a capital loss when you sell the investment.

3. Ask the charity and brokerage firm about the procedure and time frame for giving stock. 

Most banks and brokerage firms require a letter of instruction or letter of authorization to transfer the shares to charity, and a mutual fund company may have a special form. It’s a good idea to start the process at least a week before December 31, so the transfer has plenty of time to be completed during the holidays. Jane Wilton, general counsel for the New York Community Trust, recommends transferring mutual fund shares a few weeks earlier. “Some mutual fund companies are faster than others,” she says.

Please consult your tax advisor.

PAMS can received stocks via electronic transfer. For more information, please contact PAMS at 505-259-2018 or email maria@pams.org.