Marketable Securities

Stocks

Appreciated securities that you have held for more than one year are frequently the most economical assets to give to NYU Langone Medical Center. You will be eligible to take a federal income tax deduction equal to the fair market value of the stock on the date of the gift, for up to 30% of your adjusted gross income. Any unused deduction may be carried forward for up to five additional years. And you will not have to recognize the appreciation as capital gain.

For example:
Years ago, Mary purchased 300 shares of common stock in XYZ company traded on the stock exchanges for $10.00 a share, or $3,000 in total. The stock has appreciated to $50.00 a share, or $15,000. If Mary transfers the stock directly to NYU Langone Medical Center, she will be entitled to a full deduction of $15,000 on her income taxes. However, if she sells the stock first, she will have to pay capital gains taxes on $12,000 (fair market value less her cost basis) which will reduce the amount of her gift to charity.

If you have held the stock for less than one year, your tax deduction is generally limited to the amount you paid for the stock. In the above example, Mary’s deduction would be limited to the $3,000 she paid for the stock. Additionally, she would have to pay capital gains taxes on the appreciated portion.

Bonds

Bonds given to NYU Langone Medical Center can generate tax benefits for you as well. If interest rates are on the rise, the fair market value of bonds will likely decrease. If you donate appreciated bonds, you will avoid capital gains taxes and secure a charitable deduction. Keep in mind too that interest from taxable bonds will be taxed as ordinary income, rather than at the lower capital gains rate.

Mutual Funds

A gift of mutual fund shares can also be an attractive option. Recent tax law changes result in dividends on mutual funds being taxed at 15% while most interest income is taxed at ordinary income tax rates, which can be as high as 35%. Making a gift of a mutual fund shares provides all the advantages of gifts of stocks and bonds.

For details on how to make a gift transfer of stock securities, see Instructions for Transferring Securities, or contact the planned giving staff at 212-404-3640 or 800-422-4483, or by email at plannedgiving@nyumc.org.