Appreciated Securities
Gifts of securities — stocks, bonds, treasuries, and mutual funds — that have increased in value can be a way to make meaningful gifts that result in maximum tax savings.
This type of gift could be right for you if:
- You have owned publicly-traded securities for at least one year; and
- Those securities have increased in value.
Tax benefits of contrinuting publicly-traded securities
You can save income tax and capital gains tax when you give shares of a publicly-traded security that you have owned for a year or more and that have increased in value.
Information on potential tax savings
Potential Income-Tax Benefits
When you make a gift of publicly-traded securities that you have owned for longer than one year, you are entitled to an income tax deduction for the full value of the asset, not just the amount you paid for it. Deductions for gifts of appreciated assets are limited to a certain percentage of you adjustable gross income. If you cannot utilize the entire deduction in the first year, however, you may be able to carry over the excess for as many as five future years.
Potential Capital-Gains Tax Benefits
When you donate publicly-traded securities that have increased in value, and you have owned the securities for more than one year, you do not have to report any of your capital gain in the securities. If you were to sell these securities yourself, you would owe capital gains tax on the difference between the sale price and the amount you paid for them.
Should I give my securities or sell them and give the proceeds?
You should give your securities directly to the University of Maine Foundation if you have held them for more than one year and they have appreciated in value. This way, you will avoid paying tax on any capital gain you have in your securities. If you sell your securities first and then give us the proceeds, you will have to pay capital gains tax on all of your capital gain, and unneccssary and potentially substantial cost to you.
What if my publicly traded securities have declined in value?
If the value of your securities is less than their original cost, it is usually better to sell them and make a charitable gift using the cash proceeds. You may then be able to claim tax benefits for both the capital loss and the charitable gift, effectively deducting more than the current value of the assets.
How do I transfer publicly-traded securities?
If your security is held in a brokerage account, please call or ask your broker to contact us for electronic transfer instructions. If you hold the stock certificate, please contact us for instructions. Additional time should be allowed for completion of such gift transactions.
Special Note on Mutual Funds: The process for making a gift of mutual funds shares often requires special delivery instructions depending on how and where the shares are currently held. Please allow extra time for gifts of mutual funds.
When giving securities, specific advice should be obtained from your accountant or other financial advisors.
The value of a gift of publicly-traded securities will be the average of the high and low prices on the date the gift is completed. Be sure to keep acknowledgements and other records of your gifts to assure that you can use your deductions. This is especially important for gifts of $250 or more.
Please call the Foundation office at with any questions or for further instructions on donating securities or transferring securities electronically. We have professional philanthropy officers ready to work with you and your advisors. We may be reached Monday-Friday between the hours of 8 AM and 5 PM by calling 1.800.982.8503 or via email at umainefoundation@maine.edu.
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