Gift of Appreciated Securities

How it Works!

You may be holding some individual marketable securities in your investment account that have appreciated significantly since you acquired them.  If you sell the securities you will have to pay capital gains tax, perhaps at both federal and state levels, leaving less to be donated.  However, if you transfer the securities to the PSA directly from your account, you get the full fair-market value amount of the tax deduction (if you itemize), and PSA receives the full fair-market value of the securities as your donation.  No one ever pays capital gains tax on the donation. 

Step 1:
 You initiate the donation by contacting the PSA office for our account information and to explain your intent.  (ph.: 575-376-1138)

Step 2:
You contact your broker and instruct that person to transfer the securities from your account to our account, giving them our account information.

Step 3:
You receive an income tax deduction, to the extent it applies. You avoid paying capital gains tax on the appreciated value of the gift. PSA may keep or sell the securities.

Example:
Stephanie received 3,000 shares of XYZ Corp. stock as a bonus 15 years ago, which was valued at $5.00 per share.  The market value of the stock has risen to $25 per share, which means she would pay tax on $20 per share of capital gains if she sells it.  Instead, she wants to make a $1,000 contribution to the PSA Annual Fund.  She instructs her broker to transfer 40 shares of XYZ Corp. stock to the PSA, leaving her with 2,960 shares remaining in her account.

Gifts of IRA Qualified Charitable Distributions (QCD) or “IRA Rollover” Gifts

How it Works!

Donating to PSA from your IRA as a qualified charitable distribution means you won’t have to pay income taxes on the amount of the distribution.  This is only available to donors who have reached the age of 70½.  It is only applicable to regular IRA accounts, not Roth IRA, 401(k), 403(b), or other retirement accounts.  Many people have reached the age of having to take Required Minimum Distributions (RMDs), which are required of people age 70½ prior to 2019 and age 72 after 2019.  Qualified Charitable Distributions from your IRA count toward your Required Minimum Distribution. Distributions from your IRA to yourself are taxable at your marginal tax rate, both federal and state.  And the IRA distributions you take count toward your income in calculating your Medicare premium.  However, you can direct your IRA custodian to send your Required Minimum Distribution (or more, up to $100,000 per year per person!) directly to PSA and no one pays income taxes on the amount of your contribution! To you, your donation is the equivalent of a deduction whether you itemize or not because it is not included in taxable income.

Step 1:
You contact your IRA administrator and instruct that person to transfer funds from your account to PSA, giving them our name and address to send their check.  Funds must be transferred directly from the account to the PSA for the donation to qualify.

Step 2:
Please contact the PSA office to inform us of your intent and for us to address any questions.  (ph.: 575-376-1138)

Example:
John has reached the age for taking RMDs.  Based on his IRA account value and his age, his RMD for this year is $18,868.  He wants to donate $3,000 to PSA, $3,000 to his church, and $3,000 to other charities. He directs his IRA administrator to distribute the $9,000 directly to the charities, including PSA, and to send him the remaining amount of the RMD, $9,868.  His taxable income will only include the amount he took for himself, $9,868. If John is in a 22% federal income tax bracket and a 4.5% state income tax bracket, he saved $2,385 in income taxes by directing the RMD partially be paid out to his charities.

*Always consult your personal tax and financial advisor concerning the specific consequences of making gifts to PSA.