Appreciated Securities
Optimize your giving with strategic tax benefits.
Why Donate Appreciated Securities?
When you donate appreciated securities (such as stocks or mutual funds) that you’ve held for more than one year, you can avoid paying capital gains tax on the appreciation and receive a charitable deduction for the full market value of the asset. This makes it an efficient way to give more and save on taxes.
Capital Gains + Net Investment Income Tax
Depending on your income level, taxes on appreciated securities can reach up to 23.8%. By donating appreciated securities, you avoid the need to recognize capital gains, which means you can bypass both the capital gains tax (up to 20%) and the 3.8% Net Investment Income Tax (NIIT) on the appreciation.
As a nonprofit school, Summit can use the full value of the appreciated securities tax-free, maximizing the impact of your gift.
EXAMPLE
You purchased 1 share of Stock XYZ two years ago for $100, and it’s value has increased to $1,000.
If you sell the stock, you’ll owe up to 23.8% in taxes on the $900 gain, leaving you with $785 after tax.
You could then donate the $785 to Summit and receive a tax deduction for that amount.
OR
You can donate the full $1,000 worth of stock directly to Summit, through the appreciated securities program.
As a nonprofit, Summit can sell the stock tax-free, and you would receive a tax deduction for the full $1,000 value.
How It Works
1. Transfer The Securities: Contact your broker to transfer your appreciated securities directly to Summit School. We will provide you delivery instructions to give your financial institution.
2. Notify Summit About Your Transfer: Please send a copy of the Letter of Authorization to inform Summit of your intentions.
3. Confirm Your Transfer: Transfers must be initiated through your financial institution or broker. Be sure to confirm with them that your gift has been successfully transferred from your account to Summit’s account. The process typically takes 3-5 business days for the transfer to be processed, settled, and finalized.
Once the transfer is complete, Summit will provide a receipt of the transaction.
FAQ
What types of securities can Summit School accept as donations?
Summit School accepts marketable, publicly traded securities as gifts. Non-tradable assets, such as private company stock or real estate, may be considered but require approval by the Board of Trustees.
What happens to the securities once they are donated?
Upon receiving donated securities, Summit will sell them as quickly as possible, typically within five business days. The proceeds have an immediate effect on enhancing student experiences while also helping to ensure Summit’s long-term growth and success.
Will Summit hold onto my donated securities and try to maximize returns?
No, Summit’s policy is to sell all donated securities immediately upon receipt to avoid market risks. The proceeds help fuel our ability to provide whole-child, STEAM-based education.
Are there tax benefits to donating appreciated securities?
Yes, donating appreciated securities can provide significant tax benefits. You may avoid paying capital gains tax on the appreciation and still receive a charitable deduction for the full market value of the securities.
The information provided here is accurate to the best of available knowledge at the time of publication. If you find anything that should be updated, please let us know!