Planned Giving

Gifts of Stock :

Stocks and mutual funds that have increased in value and been held for more than one year are popular assets to use when making a gift.  When you donate appreciated stocks and mutual funds in support of your Diocese or Parish, you can reduce or even eliminate federal capital gains taxes on the transfer. You may also be entitled to a federal income tax charitable deduction based on the fair market value of the stock or mutual fund at the time of the transfer.

Here's an example:

Let’s say you have 100 shares of a stock that you bought for $10 per share, but it's now worth $50 per share. So, your stock’s current value is $5,000 (100 shares x $50 each), and you’ve made a $4,000 gain (100 shares x $40 gain per share).

 Scenario 1: Donating Cash
If you sell the stock for $5,000 and then donate the cash to a charity, you’ll owe **capital gains tax** on the $4,000 profit. The capital gains tax rate could be as high as 15% or 20% (depending on your income level), so you might owe $600 to $800 in taxes on the gain. You would then donate the remaining cash to the charity, reducing your tax burden but still having less to give.

Scenario 2: Donating the Stock Directly
If you donate the **stock directly** to the Catholic Foundation, you can avoid paying capital gains tax on the $4,000 profit. The Foundation, being a tax-exempt organization, will not owe any tax on the sale of the stock. Furthermore, you can **deduct the full fair market value** of the stock ($5,000) as a charitable contribution on your tax return (assuming you meet the IRS requirements for charitable giving).

Benefits:
1. **Tax savings**: You avoid paying capital gains taxes on the appreciation of the stock.
2. **Larger donation**: Since you don’t have to pay taxes on the gain, you can donate more of the stock’s value to the Catholic Foundation, potentially increasing your charitable impact.
3. **Charitable deduction**: You can claim the full value of the stock as a charitable deduction, reducing your taxable income for the year.

In this scenario, donating the stock directly can save you money on taxes and allow you to make a more impactful donation to the Catholic Foundation.

Note: to take advantage of this benefit, the stock must be **long-term appreciated** (held for at least one year).

This strategy can be especially effective if you have stocks with large gains and want to maximize your charitable contributions while minimizing your tax liability.

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Life Insurance Policies - By donating a life insurance policy to the  Catholic Foundation, you can direct the proceeds, cash value of the policy, or any portion of it to benefit the Foundation for either restricted or unrestricted purposes. 

**The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.

For more information, please contact Jane Piercy (806) 789-0566