Jun 28

Tip For Donating Appreciated Stock

Charitable GivingThe news hit this week that Warren Buffet is planning on donating almost $37 billion of his fortune in Berkshire Hathaway (BRKA) stock to charity. Take a lesson from the Oracle of Omaha -- donating appreciated shares of stock is an excellent tax strategy for charitable giving. Here's how it can work:

As long as you have held the shares for twelve months, a tax deduction worth their current market value can be taken. Then, any qualified charity of your choice can reap the benefits of the full value of the shares without paying a dime of taxes for appreciation of the stock while it was in your hands. A private foundation would have to pay a small tax, around 2%, if it sells the appreciated shares you donate. If your gift goes to a qualified charity your deduction can be up to 30% of your adjusted gross income.