Donating Stock: How to Choose the Best Option

Put your best donation forward.

You’re inspired to support your local nonprofit in launching a new program. As you review your stock portfolio, you find yourself unsure… Which stock should you donate to make the biggest impact while keeping taxes low? 🤔

Here are some simple tips to help you choose the best stock to donate:

📈 Give Your Gains
Choose stocks you’ve held for at least a year that have increased in value. By donating these long-term appreciated stocks, you can:

• Maximize your tax deduction: You can deduct the full market value.
• Avoid capital gains tax: This can save you up to 20% in long-term capital gains tax.
  
  

🧾 Itemize for Impact
While it might be tempting to take the standard deduction, itemizing allows you to fully benefit from your donation’s value. This way, you can recognize the complete impact of your generosity!

⏰ Timing Matters
If you’re donating employee stock options, hold onto the exercised shares for at least a year. This will ensure your deduction is based on the fair market value, not just the exercise price.

Need Help?
Overflow can help you identify the best stocks to donate by sorting them from most to least appreciated. This makes it easier for you to make a meaningful impact with your donation. 🙌🏽

🔗 IRS Resources for Noncash Donations
Learn more about tax-deductible contributions, valuations of contributions, etc.

• Topic no. 506, Charitable contributions
• About Publication 561, Determining the Value of Donated Property
• About Form 8283, Noncash Charitable Contributions