As a team of financial advisors who is passionate about educating their clients and creating personalized financial strategies, HCR Wealth provides insight about the benefits of donating to charitable organizations.  Generally, by year’s end, investors will choose to donate to their favorite charities by means of cash or stocks.

Donors often opt to donate cash as a habit to decrease their taxable income.  By reducing their taxable income, their overall tax liability will also decrease.  This option is a consistently viable one but donating stocks in lieu of cash can also be beneficial for both the charitable organization and the philanthropist.

Benefits of Donating Stocks

For charitable donations given by means of stocks, taxpayers who itemize their deductions at the end of the year can potentially reduce their tax liability; the amount is contingent upon the tax laws applicable for that year.

Another benefit of donating stocks is that removing them from the investor’s portfolio can help to avoid the hefty federal capital gains tax which can be as high as 20%.  Medicare imposes a 3.8% tax rate on capital gains as well, not to mention some states who charge their own percentage. Donors will release the tax liability and potentially give the charity more money by getting the full market value of the stocks.  

HCR WEALTH ADVISOR

Providing sound financial advice to its clientele is a central tenet of HCR Wealth Advisors’ philosophy, especially when clients are dealing with the vicissitudes of life.  Even when you are in a favorable position with the means to donate, having a registered investment advisory firm assist you when you are making pivotal decisions provides an invaluable peace of mind.

This article is provided for informational purposes only and should not be interpreted as investment advice.