Stock Gift Example

Do you have appreciated stocks in your investment portfolio? Stocks that you have held for more than one year? If so, consider donating and transferring their ownership as a gift to New Hope Community Church . You may claim the full market value of the securities as a charitable deduction. Under most circumstances, tax on the capital gain is completely avoided. You receive the benefit of a major tax deduction and New Hope receives a valuable gift that may be liquidated for ministry needs. Your gift may be directed as tithe or specifically designated for a particular NHCC ministry.

Gifting of securities is easily accomplished:

1. Select the security and number of shares to be donated (usually securities are donated when at highest value).
2. Contact your broker and provide instructions to transfer shares of selected stock to a New Hope Brokerage account. Do not sell the subject stock . Doing so will incur personal negative tax impacts. Record for your files the selling price per share on date of transfer.
3. Notify Pastor Jerry Schmidt, New Hope 's Planned Giving Director, of the transfer transaction. New Hope will then determine the optimum time to liquidate the subject security.
4. Securities may be transferred to any one of the following brokerages where NHCC has accounts for this purpose:
   
   

   AG Edwards	Sanstrum and Assoc
   IDS American Securities	Schawb
   Ameritrade	Dean Witter
   Merrill Lynch	Phillips and Co.

   
   If the broker you use is not listed above, a NHCC account may be established at the brokerage of your choice.
   
5. Stocks may be used as current gift or named as a gift in your estate plan.

Example:

Jim and Sue own 500 shares of ABC stock that they purchased 15 years ago for $10 per share. God has blessed their investment and the ABC stock is now valued at $50 per share. Jim and Sue would like to make a significant gift to NHCC but do not have other liquid assets to do so. If they sold the stock and donated the cash, they would experience a gain of $20,000, on which they would incur capital gains tax. However, if Jim and Sue donate the stock to NHCC via a brokerage account transfer, several great things occur:

1. Jim and Sue receive a charitable deduction for $25,000, just as though the gift was cash.
2. In most cases, Jim and Sue avoid capital gain taxes of approximately $3,000 on the donation.
3. NHCC receives the stock and liquidates it without paying tax.
4. Proceeds of the sale, $25,000 (less sales fees) bless ministry!
5. If the charitable deduction for Jim and Sue exceeds the limit for the year in which the gift was given, the deduction may be carried forward for an additional 5 years.