Giving Securities to United Way

There have been remarkable fluctuations in the value of stocks and other investments over the past decade and donors are taking time to review their investments, especially when they are considering charitable gifts.

American taxpayers have long enjoyed the opportunity to make charitable gifts of securities and other investments that have increased in value, thus bypassing capital gains taxes that would be due on the sale. The federal tax laws provide that one can give an appreciated asset and take an immediate income tax deduction for the current fair market value of the asset no matter what was originally paid for it. In essence, donors are allowed to use "paper profits" to help reduce federal and sometimes state income taxes.

Making gifts of securities and other investments has a major impact on United Way and our community. The donor benefits from reduced income taxes and avoiding capital gain taxes, and our community benefits by increased support.

Deduct the Market Value of Stock

Federal tax law permit taxpayers who itemize to deduct the current market value of contributed stock from their adjusted gross income. The stock must have been held by the taxpayer for more than one year.

For example, Jim and Sally purchased stock more than 18 months* ago for $400 and it is now worth $2,000. By giving this stock away, Jim and Sally may qualify for a $2,000 deduction even though their original cost was $400.

Save on Capital Gains Tax

Many people have benefited from gains in the stock market. However, the gain in market value brings a capital gains tax liability when the stock is sold.

In the case of Jim and Sally, assuming their stock experienced a $1,600 gain ($2,000 market value less $400 original cost = $1,600 gain), they would need to pay a $320 capital gain tax ($1,600 gain X 20% = $320) were the stock sold.
However, by giving the stock to United Way, Jim and Sally would eliminate the need to pay the capital gains tax.

*Recent federal tax law has changed the holding period for preferential tax treatment. See your personal tax advisor regarding these implications.

Reduce the Cost of Your Gift

By obtaining the double savings from income tax deduction and elimination of capital gains tax, Jim and Sally actually cut their "cost" of making a gift. Assume they are in the 31% tax bracket, their gift of cash or stock would result in a $2,000 charitable deduction or a $620 "out of pocket" tax saving. But the gift of stock would also generate a $320 capital gains tax savings resulting in a lower "cost" of the gift.

If you decide to make a gift through stock this year, you can make the transfer in one of two manners:

Transfer To United Way Account

If you have an account at a brokerage firm, simply transfer the appropriate amount of stock to the United Way account at Morgan Stanley Dean Witter.
Instruct your firm to transfer the stock to:

Wachovia Securities Financial Network
6 Water Street
Nashua, NH 03060
Acct # UWGN 3076-6907
First Clearing Corporation: DTC:0141

Please have your broker notify Wachovia Securities at 603-324-0171.
Advisor Contacts: Michael Cerato; James Abagis.
Once the stock is transferred to United Way's account, we will confirm your gift by letter.

Send Shares Directly to United Way

To send shares directly, please fill out a stock power and mail directly to United Way of Greater Nashua. Additionally, send the actual stock certificate(s) that you wish to donate, in a separate envelope, to United Way. Once United Way has received your stock and stock power, we will confirm your gift by letter.

If you have questions regarding transferring stock, please contact:
Gail Yorkell
Director of Finance at United Way
Phone: 603 882-4011