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A donation of stock allows you to deduct the full market value of the stock from your taxable income. Essentially, you’re taking a capital gain that you would otherwise owe taxes on and converting it into a deduction that will save you taxes on your normal income, so you are avoiding taxes in two places. Pre-Born! then gets a larger donation than expected, if you had to sell the stock and pay capital gains tax prior to making your donation.
Donating stock might feel a little unorthodox for a lot of people, but it can have significant benefits on your taxes, especially if you have a high annual income. You can reduce your taxable income, by avoiding owing taxes on a capital gain and supporting an organization you believe in, all in one fell swoop.
For example, say you have $10,000 of stock that you purchased at a price of $5,000 some 10 years earlier. Even if your plan is to donate all of the proceeds from the sale to Pre-Born!, you’ll have to make your donation after you pay taxes on those capital gains. If you are earning less than $425,800 that year, you will owe 15% in capital gains tax on that $5,000 gain you just realized — or $750. So you will have $9,250 left to give to Pre-Born!, should you choose to sell and then donate the cash.
But with a donation in stock, you can give the $10,000 in stock directly to Pre-Born! so you won’t have to pay that $750 in capital gains tax. Since your donation is now the full $10,000, that same $750 you would have owed in taxes is now money you can deduct from your taxable income as a charitable contribution. Win-win.
If donating to Pre-Born! through appreciated stock is attractive to you, here is the information you can give to your broker to make the transfer/donation of your stock :
Account number – Td ameritrade 425520579
Account holder – Mission Pre-Born Inc.
DTC number – 0188
TD Ameritrade,4755 Statesman Dr., Indianapolis, IN 42650 877- 832 6374