WHAT ARE GIFTS OF APPRECIATED SECURITIES?
Did you know that a gift of a stock, bond or mutual fund to a charity can benefit the donor more than a gift of the same amount in cash? Absent extraordinary circumstances, both gifts generate the same charitable deduction and are worth about the same to the charitable recipient. But if you gift publicly traded stocks, bonds or mutual funds that you have held for a year or more and that have appreciated in value, your gift to the Reading Health System Foundation will be free of the capital gains taxes you would incur if you sold them!
Imagine that you purchased a stock for $10,000 that is now worth double that amount a year or more later. Giving the stock to the Reading Health System Foundation would generate a federal income tax charitable deduction of as much as $20,000. The embedded $10,000-capital gain would not be taxed. In other words, you would benefit from “buying low and giving high.”
A gift of a stock or a bond is valued at the mean of the high and low trading prices on the date of transfer for tax purposes. Mutual funds are valued at their net asset value at the close of the date they are gifted. If you are considering transferring appreciated securities to the Reading Health System Foundation, you should first consult with your tax advisor. Your advisor can model different options, forecast their tax effects to you, and help you optimize the benefits of your gift. Because securities transactions cluster near year-end, allow plenty of time to complete a gift if the year of your donation is important to you.
Please contact us if you are interested in making a gift of securities to the Reading Health System Foundation. We will provide instructions for electronic or physical transfers and help you determine the effective date of transfer. That varies with the means of transfer and whether the securities are held in certificate or book entry form.
HOW IT WORKS:
- You transfer appreciated stocks, bonds or mutual fund shares you have owned for one year or more to Reading Health System Foundation.
- Reading Health System Foundationsells your securities and uses the proceeds to support the project or program you designate.
- You receive an immediate income tax deduction for the fair market value of the securities on the date of transfer, up to 30 percent of your adjusted gross income, no matter what you originally paid for them.
- You pay no capital gains tax on the transfer.
HOW TO MAKE A GIFT OF SECURITIES:
Your gift of securities, such as stocks, bonds, or mutual fund shares may offer advantages over a cash gift, and can support Reading Health System.
Reading Health System Foundation administers outright gifts of securities for immediate impact. To ensure efficient and timely processing of your outright gift of securities, please contact the Reading Health System Foundation to let us know your plans.
STEPS ON GETTING STARTED:
Stock Certificates Held by You
- Provide a letter of instruction that includes the unendorsed certificate(s), date, and name(s) and address(es) of donors. Note that the stock gift is a gift to Reading Health System Foundation and the area(s) it will support. Include the signature(s) as listed on the stock certificate.
- Complete a stock power form for each certificate, and take it to your bank for a medallion signature guarantee. Remember to: bring a photo ID, sign the form in front of the bank staff using the same name(s) that appear on the stock certificate, and date the form.
- Send in two separate envelopes by mail: one, the unendorsed stock certificate(s); and two, the stock power form and letter of instruction to the address below.
Mutual Funds and Bonds
- Contact us to make a gift of mutual funds or bonds. Please note that it may take up to three weeks to process mutual fund gifts. For bonds, reference the name(s) of the bond(s) to be transferred and the CUSIP number.
Reading Health System Foundation
Sixth Avenue & Spruce Street
Wyomissing, PA, 19610
Contact: Kate Thornton, President, Reading Health System Foundation
READING HEALTH SYSTEM FOUNDATION CANNOT AND DOES NOT PROVIDE TAX ADVICE TO YOU. YOU SHOULD CONSULT WITH YOUR TAX ADVISOR TO STRUCTURE AND ASSESS THE TAX BENEFIT OF ANY CHARITABLE GIFT.