dennis
Model S Plaid
1) Donating highly appreciated stock to charity is the best. Let's say I have $1000 worth of stock that has a $0 basis. If I sell the stock I pay 23.8% to the Feds and 13% to California. I am left with a profit of $632.How does this work?
Now instead if I donate that stock to charity I get to take a deduction against ordinary income. Assuming I am in the highest tax bracket the $1000 donation saves me $396 in Federal taxes and $130 in California taxes for a total of $526 in tax savings.
Bottom line: By donating $1000 of appreciated stock the charity gets the full $1000 value but the actual cost to me (vs. selling the stock) is $106.
2) Currently, when you die the basis of all of the stock that your heirs inherit is stepped up to the fair market value of the stock on the day you died. There is discussion about changing that in the Trump/Republican tax proposals if they do away with the estate tax.
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