Donating Stocks and Mutual Funds

There is a way to give to the Church that maximizes the amount you give and minimizes taxes associated with the gift. You can make gift transfers of stocks and mutual funds to the church once a year or multiple times throughout the year. The gift transfers can be applied toward your annual pledge to the church, or to help fund a special project, ministry, or event. 

For example, let’s say that you bought $500 worth of Netflix stock at the beginning of 2012. As of the end of 2018, that $500 investment would be worth 13,522.28.

If you were to sell that stock and give the proceeds to the Church, you would be paying tax on the gain of $13,022.28. At a combined Federal and State capital gains tax rate of, say, 25%, you’d have to pay $3255.57 in tax, leaving you only $9766.71 after-tax.

On the other hand, if instead of selling those shares you gave them to the Church as a charitable donation, you would pay zero tax on the capital gains and get a tax write-off for the full $13,522.28.

So, you both pay less in tax and get to write-off more. Of course, Netflix is an outlier, most investments won’t increase over 2700% over 7 years, but even if a stock or mutual fund has only gone up 50% to 100%, you’re still going to lower your taxes and increase your write-off by donating stocks or mutual funds rather than cash.

Brokerages can transfer stocks and mutual funds to other brokerages using what it called a “DTC Transfer”.

To make a DTC Transfer, please call our Finance office (925-934-4208 ext. 103).