MAKING A GIFT TO HMRI - Gifts of Stocks and Bonds

Donors who want to make the most effective use of their charitable dollars often choose to make gifts of stocks and bonds. Appreciated common and preferred stocks and bonds have special tax advantages. Consider these options in making a gift to HMRI:

Giving cash

Selling securities and donating the proceeds

Giving securities

Example: A donor wishes to make a cash gift of $5000.

Option A) If the donor falls within the 28 percent income tax bracket, he/she must earn nearly $7,000 in order to pay 28 percent tax and have $5,000 remaining to give to charity.

Option B) If the donor owns stock, he/she can elect to sell the stock and make a gift of the proceeds. Assuming the stock was purchased for one-half its current price of $80, for example, the donor could sell 75 shares for $6,000, pay the capital gains tax on $3,000 (20 to 28 percent depending upon how long the stock was owned), and give $5000 to HMRI.

Or,

Option C) allows the donor to make a direct gift of only 63 shares @$80 per share totaling $5,040, and avoid the capital gains tax.

In this example, the gift of stock benefits both the donor and HMRI.

Securities can also be used to establish a deferred gift, whereby the donor or other beneficiaries may receive an income for life.

HMRI encourages you to consult your professional advisers on all major financial decisions. For more information about helping HMRI through gifts of securities, please contact Marguerite Duncan-Abrams at the HMRI Development Office (626) 397-5804.