MoneyWise Live


Stock Gifts with Michael King

August 13, 2018

Are you an investor looking for new ways to be generous with what God’s  given you? If so— there’s never been a better time to consider making a gift of stock without having to render unto Caesar in the process.

Not all of your giving has to be in the form of cash.  Stocks could provide attractive options.  Rob West discusses those options with Michael King of the National Christian Foundation. 

It’s easy to get stuck in a rut and think that all giving amounts to writing a check. But it doesn’t have to be just that.  90% of household wealth is held in the form of non-cash assets, 10% in cash, yet 90% of charitable giving is done in the form of cash. So, you’re missing a huge opportunity for giving when we don’t consider non-cash giving. Michael King — gift planning attorney with the National Christian Foundation joins Steve and Rob to focus on donating one of our more common non-cash assets - stocks. 

Some of the points Michael covers are:

  • If they give to family members, under the Tax Cuts and Jobs Act of 2017, the gift tax exemption has been raised to $15,000 for individuals, $30,000 for couples filing jointly. That makes it much easier for folks to give part of their wealth away while they’re still living.
  • The standard deduction is increasing in 2018 to $12,000 for individuals and $24,000 for married couples. That means your eligible itemized deductions have to total more than that for donations to reduce your taxable income.
  • Donating securities allows you to deduct the current fair market value— even if it’s much higher than what you paid for those stocks.
    For example, if you bought 50 shares of something for $1,000 and the value is now $10,000, if you donate that stock you can deduct the entire $10,000 of its current value and most charities can accept securities donations in their own brokerage accounts.
  • Since standard deduction has increased which makes it more difficult to realize a tax benefit from donating stocks, you can do what is called “front loading” to a donor advised fund. By that I mean you contribute several years' worth of charitable contributions in one year to a donor advised fund like NCF’s Giving Fund. That allows you to get above the standard deduction threshold. Your gift is directed to charities over time but the full tax benefit for you is immediate with some limitations.
  • To avoid paying taxes on the gift, you want to stay under the $15,000 exemption limit for an individual, 30-thousand for a couple in a given tax year.  That gift is then counted against your lifetime exemption amount which is rather generous for the IRS - 11.2 million per person in 2018.  But keep in mind that the person you give a stock gift to will have to pay taxes based on the sale price minus what you paid for the stock originally.

Next, Rob and Steve answer some listener questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:

  • If you've had an emergency that created a need to tap your 401(k) but now you have a way to rebuild, what should you do next? 
  • If you have an opportunity to purchase a resort business but only have funds in a 401(k) and a 403(b), are there creative ways to access the funds?
  • If you are in your 80s and have a variable annuity, would it be a good idea to roll it over to a fixed annuity to simplify things?
  • If you have 3 kids with student debt and medical bills for yourself that total around $260,000, what are some ways to move forward?

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