How to Donate Stock to Charity (and Avoid Capital Gains)
Donating appreciated stock can avoid capital gains tax and give a full fair-market-value deduction. See the rules, a worked example, and 3 steps.
By Embrace Relief Team · Updated October 21, 2026
The useful part before the long read.
Stock held more than one year: no capital gains tax, and a deduction for full fair market value if you itemize (generally up to 30% of AGI).
Stock held one year or less: the deduction is generally limited to what you paid for it.
Stock that has lost value: sell it first, claim the loss, and donate the cash.
Three steps: get the transfer guide, ask your broker to transfer the shares, and notify Embrace Relief so we can receipt your gift.
Donating stock to charity means transferring shares you own directly to a nonprofit instead of selling them and giving the cash. If you have held the shares for more than a year and they have gone up in value, this is often the most tax-efficient way to give. You pay no capital gains tax on the increase. If you itemize, you can generally deduct the full fair market value, and the charity receives the shares directly. Brokerage or transfer fees may reduce the value received. Embrace Relief accepts gifts of publicly traded stock and securities.
Why donate stock instead of cash?
When you sell appreciated stock, you owe capital gains tax on the profit. If you donate the shares directly, neither you nor the charity pays that tax. The table below shows the difference. It is an illustrative example that assumes a 15% long-term capital gains rate and that you itemize.
| Sell, then donate the cash | Donate the shares directly | |
|---|---|---|
| Current value of shares | $10,000 | $10,000 |
| What you paid | $4,000 | $4,000 |
| Capital gains tax on the $6,000 gain (15%) | $900 | $0 |
| Amount the charity receives | $9,100 | $10,000 |
| Charitable deduction, if you itemize | $9,100 | $10,000 |
Your own tax rate, including any state tax or the 3.8% net investment income tax, will change the numbers. Please check with a tax advisor.
The rules in brief
| Situation | Usual tax treatment |
|---|---|
| Held more than one year, gained value | No capital gains tax; deduct fair market value, generally up to 30% of AGI. Any excess can be carried forward for up to five years. |
| Held one year or less | Deduction generally limited to your cost basis. |
| Lost value | Better to sell, claim the capital loss, and donate the cash. |
| Don't itemize (2026) | The new $1,000 / $2,000 deduction for non-itemizers covers cash gifts only, not stock. |
| Itemize (2026) | Only giving above 0.5% of AGI is deductible. |
How to donate stock to Embrace Relief: 3 steps
- 1Download the transfer guide. Go to our Stock Donations page and share the current brokerage instructions with your broker or financial advisor.
- 2Ask your broker to transfer the shares. Transfer the shares themselves. Do not sell them first, or you will owe the capital gains tax.
- 3Notify Embrace Relief. Fill in the short form on the same page after you start the transfer. It helps us match the shares to you, use the gift for the program you choose, and send your receipt.
Transfers can take several business days. If you want your gift to count for 2026, start well before December 31. The gift is generally dated when the shares arrive in the charity's account.
Records you will need
- The written acknowledgment from Embrace Relief with the date and the shares received.
- IRS Form 8283 with your tax return, for non-cash gifts over $500. Publicly traded stock does not need a qualified appraisal.
- Your purchase records, to show you held the shares for more than one year.
Can stock count as zakat?
Many scholars allow zakat to be paid by giving shares. The zakat amount is still based on the value on your zakat date. Ask your scholar how they view it. For how zakat on shares is calculated, see zakat on stocks, 401(k), and IRAs.
More year-end planning: 2026 charitable tax deduction guide and year-end giving 2026.
This article is general information, not tax or legal advice. Please consult a tax professional before you give.
Frequently asked questions
Do you avoid capital gains tax if you donate stock to charity?
Yes. If you donate appreciated stock directly to a 501(c)(3) charity, you do not pay capital gains tax on the increase in value. If you have held it more than one year and you itemize, you can generally deduct its full fair market value.
How much stock can I deduct?
For appreciated stock held more than a year and given to a public charity, the deduction is generally limited to 30% of your adjusted gross income. Any excess can be carried forward for up to five years.
Should I donate stock that has lost value?
Usually not. It is generally better to sell it, claim the capital loss on your taxes, and donate the cash.
How do I donate stock to Embrace Relief?
Download the transfer guide from the Stock Donations page, ask your broker to transfer the shares, and then complete the notification form so Embrace Relief can identify your gift and send a receipt.
What is the deadline to donate stock for 2026?
The shares must arrive in the charity's account by December 31, 2026. Because transfers can take several business days, start early.