If you are fortunate enough to be able to save money and live a comfortable life, it is important that you also consider ways to give back to your community. When it comes time to strategize about your donations to charity, you will have a variety of options that could be followed to make these donations. Most people will end up donating cash, personal items, or writing a check. However, donating a share of stock to the charity could be the best option of all. There are several reasons why a stock donation could be advantageous.
Allows You to Give More
The main reason why it can be a good idea to donate stock versus cash is that it will allow you to donate more money. If you have $1,000 in stock that you would like to donate, you will end up having to pay taxes on the sale of the stock. Depending on when you bought the stock, you could be hit with hundreds of dollars in taxes. This will then reduce the amount of money that you have to donate. If you had donated the stock directly, you could avoid the entire taxation and give more.
Provide Appreciating Asset
It also never hurts to give the donation something that they could use to their financial benefit. When you donate a stock, you are giving them an appreciating asset. This could allow them to see their assets grow.
If you are trying to plan for your financial future or manage your future tax liability, it would be a good idea to reach out to the team at HCR Wealth Advisors. When you speak with the team at HCR Wealth Advisors, you can receive a full evaluation of your financial picture and better organize your future goals. This will help you to make informed decisions that can allow you to manage risk, achieve your goals, and also find ways to give back to others.
This article is provided for informational purposes only and should not be interpreted as investment advice.