You own an asset that has grown
Stock, cryptocurrency, real estate, or another investment is worth more than you originally paid.
Tax Benefits
Give the asset. Keep more of the impact.
When an investment has grown in value, selling it can create a taxable capital gain. Donating the asset directly to an eligible charity may help you avoid tax on that appreciation while putting more of the asset's value toward the mission you care about.
The basic idea
Why give an asset instead of cash?
A direct gift can potentially create two benefits at the same time: less taxable gain for you and more value available for charity.
You donate before you sell
The asset is transferred directly to an eligible charity or charitable giving vehicle that can accept it.
More value can reach the cause
The donated appreciation may avoid capital gains tax, and an eligible donor may claim an itemized charitable deduction.
A simple illustration
Sell first or give the shares directly?
Here is an original, simplified example using publicly traded stock held for more than one year.
Original cost $5,000
Current value $25,000
Long-term gain $20,000
Illustrative federal tax rate 20%
Sell, then donate cash
Tax is taken out first.
- Stock value
- $25,000
- Estimated tax on the gain
- -$4,000
- Available to charity
- $21,000
- Potential itemized deduction
- Up to $21,000*
Donate the shares directly
The full value goes to work.
- Stock value
- $25,000
- Capital gains tax on donated shares
- $0*
- Available to charity
- $25,000
- Potential itemized deduction
- Up to $25,000*
More available for charity in this example
*Assumes the gift and donor qualify, the charity can accept the shares, and there are no fees. Actual deductions and tax results vary.
This illustration uses a 20% federal long-term capital gains rate and excludes state taxes, the net investment income tax, transaction costs, and changes in market value. It is educational, not a tax projection.
Assets with giving potential
The idea extends beyond stock.
Different assets follow different valuation, documentation, and acceptance rules, but the same principle may apply when value has appreciated.
Publicly traded stock
Shares held longer than one year are a common example of long-term capital gain property.
Donate stockCryptocurrency
Crypto is treated as property for federal tax purposes, so appreciated tokens may carry unrealized gains.
Donate cryptoReal estate
Property gifts can offer meaningful benefits, but usually require early review, valuation, and transaction planning.
Explore real estate givingBefore you give
Four questions to ask your advisor.
Your eligibility and deduction depend on the asset, its holding period, your tax situation, and the receiving organization.
Read IRS Publication 526- 1Have I held the asset long enough?
Property generally must be held for more than one year to be treated as long-term capital gain property.
- 2Can the receiving charity accept it?
Confirm the organization is eligible and has a process for receiving the specific asset.
- 3Will I itemize deductions?
Federal charitable deductions generally require itemizing, and adjusted-gross-income limits may apply.
- 4What records or valuation will I need?
Non-cash gifts can require Form 8283, acknowledgments, and, for some assets and values, a qualified appraisal.
Talk with a qualified advisor before acting.
Engiven does not provide tax, legal, accounting, or investment advice. This page is general educational information. Tax results depend on your basis, holding period, asset type, fair market value, adjusted gross income, itemization status, receiving charity, deduction limits, and applicable law.