For those that are fortunate enough to have an income and assets that allow them to live a comfortable life, finding ways to give back to those that are less fortunate is a practical necessity. When people are looking to give back, they will often donate to a charity of their choosing. If you are going to donate to a charity, you will have to decide how to make that donation. While the majority of people will donate cash, a better option may be to donate stock as this could benefit both the donor and the charity.
Allows for Larger Donation
The main advantage of donating stock versus cash to a charity is that it will allow you to donate more money. If you would like to donate cash, you may need to sell stock to do so. You are then going to face a tax burden related to the sale, which reduces the amount of money that you can donate. If you were to instead donate the stock directly, you could increase the total amount that you donate as you will be able to avoid this taxation.
Give Valued and Appreciating Asset
Charities also need to be able to think about their financial future. For many, this includes planning by purchasing appreciating assets. When you give a stock to a charity, you will be giving an asset that could appreciate in value while also providing dividend income.
There are many different financial decisions that someone will have to make on a daily basis. It is very easy to make these decisions without thinking about how they can impact your taxes and other financial outcomes. To ensure that you are making the right decisions and tracking towards your financial goals, you should meet with the team at HCR Wealth Advisors. The professionals at HCR Wealth Advisors can help you develop a personal financial plan that minimizes your future taxes and allows you to achieve your goals.
This article is provided for informational purposes only and should not be interpreted as investment advice.