Comments on: Reduce Your Capital Gains Tax Bill: Donate Stock

By: Kurt

Kurt — Thu, 06 Dec 2007 02:33:45 +0000

I think you should update the post to not use a less-than-one-year scenario. As you state in the header, this situation does not exist. Don’t know why you are using it to demonstrate your point.

By: Bob

Bob — Wed, 05 Dec 2007 14:24:53 +0000

Your example is correct, but its about a month off.

Only assets having unrealized long-term capital gains can be donated to avoid capital gains tax (max 15%).

Assets with short-term capital gains are subject to the individual’s normal income tax rate. You can donate these shares as well, but the gain will be subject to tax (at the individual’s income tax rate.)

So, it’s still a great strategy, but one couldn’t donate shares held less than one year to take advantage of it.

By: The Saving Freak

The Saving Freak — Wed, 05 Dec 2007 14:16:19 +0000

So, donating the appreciated value of stock prevents taxation and you get the write off for the donation. That’s brilliant!! I had not considered donating my non-retirement stock as an option to keep taxation down.