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Smart Approaches for Year-End Charitable Giving

Posted on November 9, 2021
autumn in the forest

As the end of 2021 comes quickly into view, you’ve probably already started thinking about financial considerations. For many people —whether it’s for philanthropic reasons or tax planning reasons (and it is probably a little of both)—one of those considerations is charitable giving. If you tend to simply write checks at the end of the year, there may be a more financially efficient way for you to support the charities you really care about, like Drexel University or Drexel University College of Medicine.

Give smart by giving stock: If you plan to itemize deductions on your 2021 tax return instead of taking the standard deduction, donating appreciated assets that you have held for more than a year will help you to avoid capital gains tax you would incur if you sold the assets yourself and donated the proceeds. This could potentially increase the amount available for Drexel University or Drexel University College of Medicine by up to 20 percent. Additionally, you can claim a charitable deduction for the fair market value of the stock on the date you make the gift, regardless of when you bought the shares.

Here’s another tip: If you believe a stock has potential for additional appreciation, consider this: donate your shares, eliminate the capital gains exposure, and then buy the shares back at their market price. This strategy gives you a cost basis equal to the stock’s current value and allows you the chance to enjoy future appreciation at a stepped-up basis.

Questions? We’re happy to help. Contact David Toll, JD, senior associate vice president, Drexel University Office of Gift Planning, at 215.895.1882 or giftplanning@drexel.edu.

Posted in Tax Smart Giving

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