The holiday season is when many people do a significant portion of their charitable giving for the year. Once you have decided which charitable organization to support and how much, you should also consider how to give that support. What I am getting at is that you can be charitable and tax-savvy by donating highly appreciated stock.
Donating a highly appreciated stock or mutual fund is a great strategy for getting rid of an investment that you have been holding because you do not want to pay the capital gains tax. The beauty of donating “in-kind” some or all of a security holding is that you get the full charitable deduction without paying the capital gains tax. “In-kind” means that the investment is not sold, but is transferred as-is to the charity instead. This way you do not have to pay the capital gains tax, because you did not sell the investment. The charity will likely sell the investment to meet their funding needs, but as a non-profit organization, they pay no tax on the sale.
The catch is that you have to have owned highly appreciated investment for more than one year. If you transfer an investment that you have owned for less than one year, you can only deduct your original cost in the investment and not the appreciation!
Of course this strategy is a bit more complicated than writing a check. You will need to obtain account information from the charity as to where to transfer the highly appreciated investment. You will then need to contact you investment broker and direct them to transfer the investment to the charity’s account. It is not difficult though; most charities are more than happy to help and it is something that investment brokers handle for their client on a regular basis.
The transfer has to occur by December 31st to qualify as a current year contribution. You cannot donate investments that have lost value and deduct their higher original cost. If your donation totals more than $250, the donation must be recorded – meaning that the charity must send you a written statement describing the donation and its value. You or your tax preparer will also need to fill out and include Form 8283 Noncash Charitable Contributions in your tax return, listing information about the charity and investment contributed.
Despite the extra work, donating highly appreciated stocks or mutual funds can be a win-win for you and the charity. This holiday season think about sharing some of your investment success with your favorite charity instead of with the IRS in April. The holiday season is when many people do a significant portion of their charitable giving for the year. Once you have decided which charitable organization to support and how much, you should also consider how to give that support. What I am getting at is that you can be charitable and tax-savvy by donating highly appreciated stock.
Donating a highly appreciated stock or mutual fund is a great strategy for getting rid of an investment that you have been holding because you do not want to pay the capital gains tax. The beauty of donating “in-kind” some or all of a security holding is that you get the full charitable deduction without paying the capital gains tax. “In-kind” means that the investment is not sold, but is transferred as-is to the charity instead. This way you do not have to pay the capital gains tax, because you did not sell the investment. The charity will likely sell the investment to meet their funding needs, but as a non-profit organization, they pay no tax on the sale.
The catch is that you have to have owned highly appreciated investment for more than one year. If you transfer an investment that you have owned for less than one year, you can only deduct your original cost in the investment and not the appreciation!
Of course this strategy is a bit more complicated than writing a check. You will need to obtain account information from the charity as to where to transfer the highly appreciated investment. You will then need to contact you investment broker and direct them to transfer the investment to the charity’s account. It is not difficult though; most charities are more than happy to help and it is something that investment brokers handle for their client on a regular basis.
The transfer has to occur by December 31st to qualify as a current year contribution. You cannot donate investments that have lost value and deduct their higher original cost. If your donation totals more than $250, the donation must be recorded – meaning that the charity must send you a written statement describing the donation and its value. You or your tax preparer will also need to fill out and include Form 8283 Noncash Charitable Contributions in your tax return, listing information about the charity and investment contributed.
Despite the extra work, donating highly appreciated stocks or mutual funds can be a win-win for you and the charity. This holiday season think about sharing some of your investment success with your favorite charity instead of with the IRS in April. 
No one imagines they will find themselves single, divorced, and living in a 4 bedroom house in the suburbs alone, and then it happens. So what do you do when you wake up and realize that your life is not at all what you ever imagined it would be? How do you “cope” and “mourn” the loss of the life you had been planning for yourself?
First, remember you are not alone. You are never alone in this. Lean on your friends, family, and a good support group – whether it’s a support group you created with a network of friends and family, or a more formal divorce support group in your area. There are so many resource out there, find people/places/networks that you feel comfortable with. Seek out professional counseling or therapy, sometimes just talking about these hopes and dreams that could have/should have/would have been to a neutral party can be such a relief.
Know that it is ok to mourn this loss. For you it may be the loss of the “perfect family” you had envisioned – whether you never had kids and always wanted them, or had 1 or 2 and had wanted more. Maybe for someone else who is forced to go back to work because of the divorce, it may be the loss of being able to stay at home with the children. Perhaps it’s the loss of a certain lifestyle one may have gotten used to or thought they would attain someday, whether financially or within a certain social circle. Maybe divorce forced you to move to new area and you are mourning the loss of being close to your friends, in a certain school district for your children, or even simply mourning the loss of your home. It’s not irrational to mourn these things, whether they are lifestyles and material items you no longer have, or were simply hopes for the future – it is ok.
Take comfort in knowing that you never know what the future has in store for you. Maybe you always wanted kids and suddenly find yourself dating someone with children that you simply adore (young or old). Think you’re too old for that reality? Maybe you will remarry and have pile of grandchildren in your future. Maybe having to go back to work will one day lead to a promotion that allows you to take your children on trips of a lifetime and provide for their college education. There is a quote by Joseph Campbell that reads, “We must be willing to let go of the life we had planned, so as to have the life that is waiting for us.” Remember that. 