Planned Giving
If you own stock, bonds or mutual funds, you can realize tax savings by making an outright gift to PWI. First, you earn a federal income tax deduction for the full fair market value as long as you have owned them for longer than one year. Second, you avoid paying capital gains tax that would be due on the sale of the stocks, securities or mutual funds.
Example: Jim purchased mutual funds for $5,000 three years ago. Today they are worth $20,000. If Jim sells the stocks, he will realize a capital gain of $15,000. He must pay taxes on the capital gain. Jim considers donating $20,000 to PWI.
| OPTION 1 Sell stock & donate cash |
OPTION 2 Donate stock outright |
|
|---|---|---|
| Ordinary Income Tax Savings (assuming 31% tax bracket) | $6,200 | $6,200 |
| Capital Gains tax(assuming 20% tax rate) | -$3,000 | $0 |
| Net Tax Savings | $3,200 | $6,200 |
By donating the mutual funds directly to PWI, Jim would completely avoid all capital gains tax and would realize larger net tax savings. For more information please contact Mark Berger at (619) 681-1999 or send e-mail to mberger@pwiworks.org.