A great way to give to the Lord and also save taxes is to donate appreciated stock (stock whose cost is less than its current value) instead of selling then donating the net cash proceeds after taxes.You not only get a charitable deduction for the value of the stock, but you pay no capital gains taxes that you would from a sale and subsequent donation.

Example:
You own 500 shares of Merck valued at $30 per share for which you paid $5 per share.

If you sell the shares:

• You will pay capital gains taxes of $1,875 )sale price of $15,000 less cost of $2,500 = $12,500 gain x 15% capital gains tax)
• If you then donated the net proceeds after taxes of $13,125 ($15,000-$1,875), that amount would produce a tax benefit of $1,969 at the 15% income tax bracket.

The net tax savings would be $94 (1,969 tax benefit less $1,875 tax cost).

However, if you donated the shares directly to the Seminary:

• You  pay no capital gains tax
• You will receive a charitable deduction of $15,000

The net tax savings would be $2,250 (at the 15% income tax bracket).

The tax benefits increase further if your income tax bracket is larger than 15% (the maximum income tax bracket is 35%).

However, if a stock has declined in value from the time you purchased it, then you are better off selling the stock, deducting the capital loss, then donating the net proceeds for a charitable deduction.

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