Most people give money to their church by dropping an envelope in the collection plate each week as it passes them. Bless you for your generosity.
But there may be an even better way of giving that allows you to give even more without costing you more: giving appreciated stock. Appreciated stock is stock that has gone up in value from the time you bought it.
Here is an example of how this works to everyone’s benefit:
Supposed you wanted to give your church $2500. You have stock in the XYZ Company that’s worth $2500 today, but you only paid $500 for it years ago. If you sold those shares today the federal government is owed $300 in taxes ($2000 gain X 15% = $300). After you pay the tax, the church would only get $2200 ($2500 – $300 = $2200). But if you gave the stock directly to the church, the church could sell it and – because the church is tax exempt – the church would get the entire $2500.
In this example, the cost of your gift is $500, the church gets $2500, and you get a $2500 charitable deduction.
This is especially useful if you have stock whose original cost you don’t know, such as gifts from parents, or shares that you bought many years ago without keeping a record. Giving the stock to the church solves the tax cost problem and may allow you to give more than giving cash.
It’s easy to do. Just ask the church for the name of the investment firm they use and the account number. Then instruct your custodian to send shares from your account to the church account. It’s that simple.
Finally, be sure to tell your pastor what stock you are gifting and the number of shares. Without this information your church will not know who made the gift and can’t provide you with a confirming letter you can use to take a tax deduction.
For more information, call Arie Korving or Stephen Korving at Korving & Company.
Phone (757)-638-5490 or go to our website: www.korvingco.com
Bond investing today
Bond investing in today’s ultra-low rate environment has many investors frustrated and many professionals worried. Why? Because once interest rates start going up, the value of existing bonds goes down.
Here are some comments from the manager of a bond fund we use in our mutual fund portfolios … the Loomis Sayles Bond Fund:
Despite his high cash position, the fund has done very well.
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