(FROM A FELLOW PARISHIONER)

Many of us have estate plans that provide for charitable contributions of highly appreciated assets after death. Current IRS regulations make it very beneficial for owners of highly appreciated assets to donate them before death. Various classes of assets can be donated. For this discussion we are describing a publicly traded stock donation. Please note: donors 
should seek advice from their brokers, advisors, accountants and 
attorneys before making a direct stock charitable donation.  

Federal and state capital gains taxes apply to donors' stock sale profit on an annual basis. Assuming a 90% increase in value and a combined 
federal and state 20% capital gains tax, donors must sell $11,800 of stock to have cash for a $10,000 qualified charitable contribution. Contributing the actual stock eliminates the capital gains tax and results in a $10,000 charitable deduction for the donor

Both the donor and recipient must have appropriate accounts and follow certain procedures to make qualified stock donations. The recipient must have an account that can receive stock transfers, sell the stock and have the ability to transfer the cash to the intended end user. The donor must make the donation in the same ownership name as the stock ownership. 
The donor stock ownership name must be consistent with the donor’s tax return information. If the stock is owned by a trust the trust must have wording that makes it a “qualified” trust for charitable contributions.

The contribution process generally consists of a “letter of intent” from the donor to the receiving entity describing the stock contribution the intended end user and use and requesting the stock transfer account and numbers. The receiving entity provides the transfer and account information to the donor. The receiving entity is often not the end user. For St Bernard, Our Lady of Good Hope, St. Francis or St. Brendan donations, the Portland Diocese is the receiving entity, while the churches or parish are the end user. In essence, the Diocese receives the contribution and forwards it to the donor’s intended user.

The donor provides a letter of instructions to their relevant broker, advisor, accountant or attorney describing the transfer and recipient along with the number of shares to be transferred from account XXXX to recipient account YYY for the intended end user and use. 

The recipient provides confirmation of receipt.  The paperwork is important for the donor's tax records and to be filed with the donor's tax return to create a full value qualified charitable contribution. If you are interested in learning more, call the parish office at 236-4785.