How to Donate Stock to Charity

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Most people understand that they can donate material goods to charities and then claim the value of the items as a tax write off. However, many don't realize that you can do the same thing with intangible times such as stock. Donating stock to a charitable organization does not provide a dollar-for-dollar tax deduction, but can still reduce a person's tax liability. The basic process of donating stock is fairly straightforward.

Call a certified pubic accountant or a tax professional to determine how the donation will affect your taxes. In general, it is better to donate stock that has appreciated in value rather than stock that has lost value.

Look up the name of the charity at the IRS website (See Resources) to ensure that they are a 503c certified organization or a religious organization, which are the only ones that you can obtain a tax deduction for. You can donate to unapproved charities, but you will receive no tax benefits.

Call the charitable organization that you want to donate to and ask them the name and account number for their brokerage account. Not all charities have brokerage accounts set up, in which case they must establish one or you cannot donate your stock to them.

Contact your brokerage account and provide them with the transfer information you obtained from the charitable organization. Tell the broker how much of the stock you wish to donate and the date you want it transferred on.

Print out a copy of the stock transfer transaction and place it in your files for tax purposes. In addition, ask the charity to provide you with a receipt as soon as it receives the funds.

Tips & Warnings

  • Although you can donate any stock, you will only receive the tax benefits on stock that you have owned for longer than one year.
  • Many larger charities have their stock donation procedures on their websites.
  • You can donate mutual funds as well as stock to charities.
  • If you have a stock certificate for individual stocks, sign your full name on the back of it and hand-deliver it to the donation coordinator of the charity.

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