What is Donating appreciated property?
In short
Giving long-term appreciated property, such as stock held over a year, directly to a public charity lets the donor deduct its full fair market value and avoid tax on the appreciation.
Key takeaways
- The deduction is generally limited to 30% of adjusted gross income, with a 5-year carryforward.
- For short-term property, the deduction is limited to basis.
- Property that has fallen in value should be sold first, so the loss can be deducted, and the cash donated.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer in a high bracket owns publicly traded stock held for 10 years that has appreciated greatly. She wants to give to a public charity. Which approach generally gives the best tax result?