This tax savings calculator is to be used for illustration purposes only. Actual tax savings and benefits will vary for each individual based upon his or her tax situation, and these differences may be significant. The amount of your deduction is limited to 50% of your adjusted gross income and may be limited to 30% or 20% of your adjusted gross income, depending on the type of property you give and the type of organization you give it to. You should consult a CPA, attorney, or other qualified tax professional to determine the benefits available to you when making a charitable gift.
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“Gift Amount” The gift amount available as a charitable deduction is the fair market value of the instrument as of the date of the gift.
“Cost Basis” The basis of the securities donated to the charitable organization is the actual cost to the donor is the securities were purchased. If the securities were inherited, the basis is generally the fair market value of the securities at the time of the decedent’s death. If the securities were received as a gift, the basis for the donor is generally the original basis of the person giving the gift.
The gain from the sale of securities is the excess of the sale price over the basis. Gains are taxed at ordinary income tax rates if the securities were held one year or less. Capital gains on securities held greater than one year are taxed at rates generally lower than the tax rates that apply to other income.
For 2008, capital gains from the sale of securities where the regular tax rate that would apply is 25% or higher would have a maximum capital gain rate of 15%. If the regular tax rate that would apply is less than 25%, the maximum capital gain rate is 0%. If your capital gain is from collectibles (such as art, antiques, metals, gems, stamps and coins), then your maximum capital gain tax rate is 28%. Gains on qualified small business stock also have a maximum capital gain rate of 28%. There have been various proposals in Congress to change the capital gains tax rates. You should consult a tax advisor as to the impact of a gift of appreciated securities on your personal tax situation.
“Tax Bracket” The marginal tax rate, that is, the rate at which each additional dollar of income is taxed, is commonly referred to as your tax bracket. The Internal Revenue Service has issued tax rate schedules for 2009.
