Designate and Donate - Stocks and Investment Account

Ask the brokerage or mutual fund custodian for a TOD (Transfer on Death) form. Some companies also call these beneficiary designation forms.

Designating and Donating appreciated stock or mutual fund account plan.

Designate and Donate — Stocks and Investment Accounts

 

How It Works

  • Contact your broker about a TOD (Transfer on Death) form to designate and donate a single stock certificate. Contact your broker or investment account holder about a TOD (Transfer on Death) or beneficiary designation form for mutual funds or other types of investment accounts.

 

Benefits

  • You receive an income tax deduction for the fair market value of the securities on the date of transfer, no matter what you originally paid for them.

  • You pay no capital gains tax on the transfer when the stock or share of investment account is sold.

Gifts of Stock and Appreciated Assets: 

A gift that’s right for you?

A gift of appreciated securities is for you if…

  • You're holding stocks, bonds, or mutual fund shares that have increased in value.

  • You want to make a gift that doesn't affect your liquidity or cash flow.

  • You want to make an outright gift, or fund a gift that will first return lifetime payments to you and/or another beneficiary.

  • You want to diversify your assets to increase your income without having to pay the capital gains taxes that would result from a sale.

A $5,000 cash gift and a gift of $5,000 in appreciated securities both generate the same charitable deduction.

But if you use publicly traded stocks, bonds, or mutual fund shares that you have held for a year or longer to make your gift, you will receive an additional tax benefit: The IRS allows you to make your transfer to LLBN without recognizing capital gains on the appreciation. You can thus leverage a larger donation than you could make with cash — and receive a larger tax benefit — by "buying low and giving high."

Your gift of stock is valued, for tax purposes, at the mean of the high and low on the date the shares are received in our account. Mutual funds are valued at the "net asset value."

If you and your advisors are transferring assets at the end of the year, it is especially important to note the following.

  • For stocks transferred through the U.S. Post Office, the gift date may be found in the postmark. (Stock certificates should be sent unsigned to LLBN c/o Western Adventist Foundation with an executed stock power mailed under separate cover on the same day.)

  • Gifts delivered by UPS, Fedex, or any other delivery company are credited, by law, on the day received by LLBN c/o Western Adventist Foundation.

Important Tip: Don't sell the stock first. Even though you may give us the proceeds as a gift, the IRS will impose capital gains tax on your sale, wiping out the benefits of this arrangement.

Stocks and Investment Accounts: You've planned for the Future

Investment accounts hold cash or stocks for the long term. You may have a mutual fund or a brokerage account, which is held at a financial institution. The objective of these accounts is to achieve long-term growth, provide future income or preserve capital. After your passing the remaining account balance may be transferred to heirs or charity.

When you opened the account, you should have received a form that tells the financial institution what to do with the assets when you pass away. This form is called a "Transfer on Death" (TOD) form. With it, you decide how your assets will be transferred. If you do not complete this form, you will cause unnecessary confusion among your heirs and added expense to your estate administration.

Keep it simple. Ask the account custodian for a TOD form, complete it, and share it with your financial or legal advisor. You can also leave all or a percentage of the assets to LLBN. Any portion of your investment account left to LLBN will be exempt from estate and inheritance tax. You also avoid paying any capital gains on assets that have increased in value over the years!

NOTE:

The information contained in this website is not intended as a substitute for tax or legal advise. LLBN encourages you to consult with your financial advisor, tax accountant, and attorney for legal advise specific to your situation.

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