Giving stocks and bonds is a popular method of donating to HI-USA. That’s because stocks and bonds that have increased in value provide even greater tax benefits than gifts of cash.
Owners of appreciated assets can obtain substantial tax benefits by transferring those assets directly to HI-USA.
First, donors will receive an income tax deduction equal to the fair market value of the stock on the effective date of their gift. Also, you can avoid capital gains tax on the transfer.
Five years ago, Donor bought 100 shares of Universal International Company at $50 per share (for $5,000). The current fair market value of the shares is $150 per share (or $15,000). Donor decides to dispose of the $15,000 stock and make a gift of the proceeds to HI-USA.
If Donor sells the stock, Donor will pay a capital gains tax on the $10,000 gain between the original purchase price ($5,000) and the current market value ($15,000). At a 15 percent tax rate, Donor will pay $1,500 tax on the $10,000 capital gain.
On the other hand …
If Donor makes a direct gift of the shares of stock to HI-USA, no capital gains tax is due on the transfer, plus Donor will receive an income tax deduction for a gift of $15,000. The income tax deduction for a $15,000 gift is $4,200 (in the 28% tax bracket). Plus Donor saved the $1,500 of capital gains taxes.
The $4,200 tax deduction and the $1,500 capital gains tax savings add up to $5,700. So, in the end, it costs Donor only $9,300 to make a $15,000 donation.
Making the transfer is simple:
You may hold your stock in a brokerage account or by your possession of stock certificates. By following these guidelines, you can make your gift of stock easily and efficiently.
Transferring Stock from a Brokerage Account
If your stock is held in a brokerage account, you may transfer funds by instructing your broker to transmit the securities electronically to:
Account Name: American Youth Hostels Inc (we do business as Hostelling International USA)
Account Number: 33385842
DTC Number: 0062
Federal Tax ID Number: 13-5639689
Broker: Vanguard Brokerage Services
Before making a transfer, please contact us at 888-449-8727 or firstname.lastname@example.org to let her know about your intention, so we can watch for the arrival of your gift in our brokerage account and identify it (for security reasons, we cannot obtain donor information from our broker).
Donating Stock Certificates You Hold
To donate stock certificates you hold, please contact us at 888-449-8727 or email@example.com and request the Authorization to Deposit Stock and Bond Certificates form.