Tocqueville Society

Tax Advantage Giving

The United States Government encourages contributions to private charities like United Way by providing within the tax code, income tax deductions for donors who itemize their federal tax returns.

Donors can make gifts at reduced costs. For example, if you make a cash contribution of $10,000 to United Way, you can claim a deduction of $10,000 on your tax return; if you are in the 35 percent marginal income tax bracket, you will reduce your overall federal tax liability by $3,500.* In effect, you can give $10,000 to United Way to change lives in our community at a cost to you of $6,500. Similarly, if your gift was in appreciated stock as shown in the chart, the cost to you would drop to $5,000.

Long-term appreciated stock gifts are deductible at their full fair market value for both federal and Maryland income tax. There is no capital gains tax due on the appreciated portion.

The ability to avoid tax on capital gains at both the federal and state level makes gifts of appreciated securities particularly attractive to donors. Of course, any of these contributions will be valuable to our community and will support individuals and families in helping build better lives.

Comparison of Tax Savings From Three Gifts of $10,000

Click here to learn how to give a gift of stock.

*There may be additional savings in avoiding Maryland state income tax. Charitable gifts are subject to the deduction limits set by the Internal Revenue Code. Any excess deduction can be carried forward over an additional five years. Additionally, charitable contributions are subject to the phase-out of itemized deductions for certain high income taxpayers. This material is intended for illustration only; we always encourage individuals to review their plans with their own counsel to ensure that their particular circumstances are fully considered when calculating the tax consequences of any charitable gift.