A tax-deductible charitable contribution to a 501(c)(3) nonprofit organization like Embrace Relief is an excellent way to help others while reducing your own tax burden. And with the 2022 tax year ending on December 31, you may be considering a cash gift that you can itemize and deduct from your taxable income.
But did you know that donating stock to a nonprofit is another smart way to get the full value from your assets?
If you have owned publicly-traded stock for longer than one year, and that stock is worth more now than when you bought it, you can donate your stock directly to Embrace Relief, where it will go towards any of our eight humanitarian aid programs we operate throughout the world.
Why donate stock to a charitable organization like Embrace Relief? Because under U.S. tax law, it’s a financially sound way of liquidating your stock and utilizing its full value for the benefit of others, while also avoiding costly capital gains taxes.
Think of it this way: Imagine you wanted to donate to a good cause close to your heart. Your stock portfolio is doing well, so you sell shares of stock worth $1,000, which you will use for your gift. But when you sell your stock, you will have to set aside some portion of that money to pay federal and state capital gains taxes. That means that your gift – and the amount of the charitable deduction from your taxable income – is now worth less than $1,000.
Donating stock directly to your charity of choice avoids this problem.
In the example above, a donation of stock worth $1,000 to Embrace Relief means that every dollar goes towards our eight humanitarian programs. Under the tax code, your donation would not be subject to capital gains taxes, which means that Embrace Relief would receive the full $1,000 value of your donation once we sell your stock. You can then deduct this full value from your taxable income for the year. And as a 501(c)(3) organization, Embrace Relief would not pay capital gains on this windfall, either.
That’s good for your wallet and your 2022 tax return. More importantly, it’s great for the people who will receive clean water, nutritious food, cataract surgeries and educational opportunities thanks to your donation to Embrace Relief.
As always with any decisions related to buying and selling stocks, you should consult your financial advisor before choosing to donate. But if you have been fortunate to have a profitable year in the market, or if a sale of stock might bump you up into a higher tax bracket, a donation of stock is a sensible way to help yourself and others at the same time.
To make a stock donation, follow these steps:
- Inform your broker that you wish to gift shares of stock to Embrace Relief, and they will provide forms to do so. We accept stock in certificate and electronic form.
- Transfer your stock certificate to Embrace Relief, either electronically or by mailing your stock certificate in a Certified Mail package to our office address:
Embrace Relief Foundation
18 Passaic Avenue #1
Fairfield, NJ, 07004 - Notify Embrace Relief of your stock donation by filling out the form on our Stock Donation web page. This step is crucial, as you will need a receipt from Embrace Relief in order to claim the deduction for your charitable donation. The form will also allow you to specify whether you would like to donate to Embrace Relief’s general fund, or to a specific program.
Thank you for your consideration!
