by Charlotte Wood
(last updated February 21, 2009)
It's always an investor's greatest dream to make it big. Making coffers of cash through stocks and other investments is really every investor's inner desire; seriously, who wouldn't want to hit it luck with their stocks? However, outrageous success in stocks is a double-edged sword. The underlying catch to all of this is taxes. However, there is a way to avoid taxation while still benefiting yourself and that's where you should consider donating stocks.
If the income tax on your stock returns will be significant, more than you want to pay, then you should definitely consider donating your stocks. You can donate your value-increasing stock to a charity and then you don't have to pay taxes. Also, it's not like you'd be just handing the taxes over to someone else because charities don't have to pay taxes so you'd really be quite the philanthropist if you decided on such a course of action.
The benefit of donating stock doesn't just lie in feeling good about yourself however; you also receive a tax deduction yourself and this deduction is as much as you donated, thus you gain but in a different way. Say you had a $15,000 stock and donated that stock to your favorite charity. Instead of having to pay taxes on it, you actually receive a $15,000 tax deduction because of your generous donation, so that money is just taken off of what you owe the government. (This could manifest itself in either a greater portion of your paycheck allotted to you each pay period, or even better, a hefty tax return!)
Donating stocks is an easy endeavor and only takes a call to your broker or other investment specialist and they'll be able to work with you on your generous donation. Stock donations are great for charities and are sums of money that can make an immediate difference. If you have substantial stock success, you should most definitely consider donating stocks because not only will you benefit financially, you'll also just feel good!
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