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The Law Offices of Alan E. Sohn Chartered

Donating Appreciated Stock and Securities

  • By: Alan E. Sohn
  • Published: August 15, 2012

DONATING APPRECIATED STOCK AND SECURITIES (Since the Stock Market Debacle of 2008 and 2009)

The stock market has made a tremendous comeback and the values of the common stock of many
companies have returned to or exceed their former highs. Some people, who still had the wherewithal, went back into the market and purchased at what are now considered very low prices compared to today’s values.

For an investor who is charitably inclined and had concern about the stock market being able to maintain its current level, rather than selling the stock, an option that might be advantageous could be to donate the stock to a favorite charity and thereby reap several benefits.

First, the donation would be fully deductible at its current value. Second, whereas a private sale would incur a capital gains tax, the charitable donor would avoid a capital gains tax by donating the stock to a 501(c) (3) charitable organization.

Finally, and perhaps most important, one could benefit the donee organization and its constituency. Such organizations also suffered significant losses due to the drop in the markets in 2008 and 2009, and many have been unable to recoup their losses. A gift to such a charity may not only help the organization to cure disease, feed the poor or educate those who may not be able to afford it without financial assistance, but also provide the donor with “psychic income” from the knowledge that he/she has done their part in serving others.

Alan E. Sohn

Alan E. Sohn received his Juris Doctorate from the College of Law of the
University of Illinois. Mr. Sohn has been a partner in both large and
smaller law firms and for the past 21 years has been in private practice.