Q&A: Donating stock to charity

January 23, 2009

Is it better to give stock that has appreciated or depreciated to a charity?

Q: Is it better to give stock that has appreciated or depreciated to a charity?

A: Never donate stocks that have gone below your basis, since you will not be able to write off the loss. It is better to sell the stock, take the loss, and give the proceeds to the charity. Conversely, if you have a gain and have held the stock for at least one year, gifting appreciated stock is advantageous since you will not only enjoy the tax deduction, but you avoid the capital gains tax on your investment as well.