There are many financial benefits to making a gift of appreciated stocks, bonds, or mutual funds that you have owned for at least one year. Not only will you pay no capital gains tax on the asset, but you also receive an immediate tax deduction for the fair market value of the securities you gifted. Below is an illustration that shows you would save $1,500 by making the same $10,000 gift using appreciated securities.
|Gift of Stock||Gift of Cash|
|Income Tax Savings (25% Tax Bracket)||$2,500||$2,500|
|Capital Gains Tax Avoided||$1,500||None|
|Total Tax Savings||$4,000||$2,500|
|Net Cost of Your Gift||$6,000||$7,500|