Donate Appreciated Stock and Bypass Capital Gains Tax
Robert and Kelli Dashelt were nearing retirement. Over the years, with the help of their financial advisor, they made solid investments in securities and built a sizable portfolio. While their investments increased substantially in value, their potential capital gains tax bill was rising as well. Now with retirement on the horizon, the Johnsons were looking for a way to sell their highly appreciated stock, generate income for their future and avoid paying high capital gains tax.
ROBERT: For many years we had supported the work of several different charities. By contacting an advisor at one of the ministries, we learned that we could make a gift of our appreciated stock to charity and bypass the potential capital gains tax cost we were facing. I was delighted to learn that after transferring our stock to a charitable remainder trust, the trust would sell the stock tax free.
KELLI: I liked the fact that the trust would provide us with income for our retirement years. If something happened to Robert, I would still be taken care of for the remainder of my life.
Robert and Kelli decided to make a gift of their appreciated stock to establish a charitable remainder unitrust. They were thrilled at the prospect of creating future income while bypassing capital gains tax.
ROBERT: When I heard that in addition to the other benefits we would receive a charitable deduction for our gift, it was just icing on the cake! I wonder why everyone nearing retirement doesn't set up a charitable trust?