The IRS still allows a notable tax break for individuals considering a charitable gift: Donors may deduct the full, fair market value of appreciated assets given to InterVarsity, with no recognition of capital gains. That means that donors can leverage a large donation and charitable deduction using an asset with a small cost basis.

How it works:

A supporter holds publicly traded stock with a fair market value of $10,000, which she bought for $5,000. If she contributes the stock to InterVarsity, she will be able to claim a charitable income tax deduction for the full $10,000. In addition, she will not be liable for tax on the $5,000 capital gains upon the transfer of her stock. By using stock instead of cash, she has delivered $10,000 to InterVarsity and secured a tax deduction in the same amount, at a cost to her of only $5,000.

Some details:

Don't sell the stock first and then give us the proceeds! Even though you intend to make a charitable gift, the IRS will impose capital gains tax on your sale, wiping out the benefits of this arrangement.

Here's how to transfer securities: Have your broker contact Bev Phillips to arrange the transfer to InterVarsity's account. Your charitable deduction will be valued as of the date the securities reach our account. If you hold the shares yourself, mail them, and, in a separate envelope, stock powers in blank, to:

Bev Phillips
Donation Services
InterVarsity Christian Fellowship/USA^®
6400 Schroeder Road
P.O. Box 7895
Madison, WI 53707-7895
608-443-3660
608-274-7882 (fax)

Your charitable deduction will be valued as of the postmark date on your envelope transmitting the securities.

Donors may deduct gifts of appreciated assets up to 30 percent of their adjusted gross income (the total of their taxable income). Thus, a donor whose adjusted gross income will be $100,000 this year will be able to deduct up to $30,000 in gifts of stock. A gift in excess of the 30 percent amount is not wasted, however, because the IRS allows donors to carry forward excess deductions through the five tax years following the year of the gift.

Note that the IRS allows donors of cash gifts to deduct them up to 50 percent of their adjusted gross income, so the deduction for a very large gift of appreciated assets could take longer to use up than if the gift had been made in cash. But if the assets have a very small cost basis, however, they could still be more tax-efficient to use than cash.

InterVarsity Christian Fellowship/USA^® does not offer legal or tax advice for your gift plans, but we do strive to provide helpful educational information and also strive to work carefully with you and your advisors to help you to accomplish your charitable goals.