Let us assume you have highly appreciated stock, purchased for $30,000 (the cost basis), now worth $100,000. The stock is producing a two percent dividend.
If you sell that stock to reinvest in stock that produces a greater income for you, your capital gains tax will be $10,500 (15 percent of the $70,000 gain), leaving you with only $89,500 to reinvest.
If, however, you place your $100,000 of stock in a trust and name one or more charitable organizations as remainder beneficiaries, you can arrange for the trust to pay you a six percent income for the rest of your life.
The tax advantages of this option are good because
you receive an income tax deduction in the year you create the trust based on the value that is expected to pass to charity, and
the trust is a tax-exempt entity and can buy and sell stock without losing any part of its value to capital gains tax.
In addition, you have the knowledge that your funds will someday make a significant difference in the lives of others through your charitable gift.
Paoli Hospital Ways to Give
255 W. Lancaster Ave.
Paoli, PA 19301
For more information, call 1.866.CALL.MLH.