Saving Tax by Donating Stock to the Opera

Instead of donating cash to the Opera, think of donating shares of stock that have increased in value since you bought them.  

 

Under our tax laws, when you contribute those shares you get to deduct the full value of the shares on your income-tax return, and you do not pay tax on the increase in value of the shares since you bought them.

 

Suppose, for example, that you paid $8,000 to buy 200 shares of Exxon and the shares are now worth $18,000, an increase of $10,000.  If you sold the 200 shares and contributed $18,000 of cash to the Opera, you would have to pay tax on the $10,000 increase.  The total taxes, if you live in Louisiana, could be as much as $2,500.  But if you donated the shares to the Opera (or any other 501(c)(3) organization), you would pay no income tax.  And the $18,000 tax deduction for the contribution is the same either way!

 

This tax break works for any shares that you have held for at least one year.  It also works for shares that you inherited, but no one-year wait is required.  And it works not only for stocks but for other kinds of securities as well, including mutual funds, ETFs and bonds.

 

For information about contributing stock or other securities, please contact the Opera’s Director of Development, Bart Folse, at 504-267-9532 or at bfolse@neworleansopera.org.

 

This is one of a series of planning ideas.  These short memos are designed to encourage you to find out more.  They are not intended as legal or tax advice.  For that advice you should consult your own lawyer and/or accountant.