Is This Asset a Good Gift?
A guide to donating appreciated assets
You want to donate an asset
Let's find out if it's the right choice for a charitable gift.
Have you owned it for more than 1 year?
This determines if it qualifies for long-term capital gains treatment.
Not Optimal Gift
Short-term assets (held less than a year) or assets that haven't appreciated don't get the same tax benefits. Consider:
- Donating cash instead
- Waiting until you've held the asset for over a year
- Donating a different appreciated asset
Has it increased in value?
Is the current value higher than what you originally paid (your cost basis)?
Perfect Gift – "Designed to Donate"
Why this works:
- You deduct the full fair market value
- You avoid paying 15-20% capital gains tax
- The charity receives the full value
- This is the only time donating the asset makes more sense than selling it yourself
Examples of Great Long-Term Appreciated Assets
Any of the following assets that have been held for over a year are good candidates for a charitable gift.
- Stocks that have gone up in value
- Real estate that has appreciated
- Mutual funds or ETFs held long-term with gains
- Cryptocurrency held over a year with appreciation
- Artwork or collectibles that have increased in value
Endaoment accepts all of the above assets for donations.
Understanding the Tax Benefits
Capital gains tax rates:
- Standard rate: 15% for most US taxpayers
- Higher earners: 20% if income exceeds ~$500,000
When you donate appreciated assets held over 1 year:
Your deduction equals the current fair market value, and you skip the capital gains tax you'd pay if you sold it yourself. Otherwise, you are limited to a deduction of the cost basis.
Example:
You bought stock for $10,000. It's now worth $50,000. If you sold it, you might pay $6,000-$8,000 in taxes. If you donate it, you get a $50,000 deduction and pay $0 in capital gains tax.
The average US investor pays about $10,000 in capital gains taxes each year. Donating appreciated assets can help you avoid this tax burden.
Important
Everyone's tax situation is unique. We encourage you to reach out to a financial professional to understand how this applies to your specific circumstances.