MICHELLE SMALENBERGER, CFP ®

Let’s take some time to talk about the behind-the-scenes of stock gifts.  This is when you are giving stock you own to charities or not-for-profit organizations.  That’s exactly what is happening you give them shares of stock because you want to give them money.

1. One benefit to you is that you don’t have to use funds from your daily cash flow.  Your daily income and expenses aren’t affected because you’re just moving shares of stock.
2. The second benefit is that you avoid paying any tax on gains your stock has generated.  Not only do you not pay tax on the gain but the organization receiving it doesn’t either.  Be sure not to sell the stock first.

Now that you’ve decided you’re going to gift stock to an organization you need to understand your to-do list.

1. Get the details from the organization you are giving to.  You’ll need to know where to send the shares of stock. Information you may need includes:
   1. Organization’s account number
   2. Name on the account
   3. Where that account is held (For example: Fidelity, Schwab, TD Ameritrade)
   4. DTC number
2. Provide written instructions to your advisor or company that holds your account stating that you want to give a certain number of shares of that company to this organization.  You’ll note all the specific details mentioned above so that the funds can be sent where needed.

Once the shares are received by the organization they are typically sold.  It makes sense if you think about it. Your goal was to give money to that organization and they are not in the business of managing a stock portfolio.  So the shares get sold and then the money sent to their bank account to use the funds as is necessary.

You may find this is helpful to understand the process and what happens with the stock you give to organizations you believe in!

Wondering how this affects your investments? Schedule a call with Michelle and Steve to discuss your portfolio today.