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Individual Charitable Donations: Donating Appreciated Property

Sometimes you might have property that has increased in value over time known as appreciated property. In deciding what to do with an appreciated property, it is good to consider the tax benefits of donating appreciated property to a qualified charitable organization.

Appreciated property held for more than one year may be donated to a charity without incurring any capital gains tax and is generally deductible at fair market value. This is a great benefit to consider because when the capital gains tax of an appreciated property is eliminated, your available charity donation can be increased by up to 20% more than what you would have donated if you sold the appreciated property before donating the proceeds to charity. Additionally, you may claim a fair market value charitable deduction for the tax year in which the gift is made and may choose to pass on that savings in the form of more giving. While appreciated non-cash assets often are the most tax-smart charitable gifts, not all charities have the capabilities to accept these gifts. Donor-advised funds, which are 501(c)(3) public charities, typically have the resources and expertise for evaluating, receiving, processing, and liquidating the assets. Some assets you might donate to a donor-advised fund include publicly traded securities, restricted stock, real estate, privately held business interests, private equity fund interests, cryptocurrency, fine art, collectibles, IPO stock, and equity compensation awards. Therefore, donating appreciated property is a smart way to maximize your tax savings.