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Gifts of publicly-traded securities, closely held stocks, and mutual funds
not only can benefit Villanova, but can also be structured in ways that will be
extremely beneficial to you by minimizing taxes.
Publicly-traded Securities
Gifts of readily marketable securities that have appreciated provide an
excellent means of benefiting the University while improving your tax picture.
When you give such securities to the University (rather than selling them and
donating the proceeds), these gifts will be credited at the full fair market
value based on the average of the high and low quoted selling price on the day
you relinquish control of the asset to the University. The University’s general
policy is for securities to be sold immediately by the University through its
agent or representative.
For Example:
Jim has a stock account with a well-known brokerage company. One of his
stocks has grown from $15 a share to $75 a share over the past few years. If
he asked his broker to sell the stock he would owe tax on the $60 of
appreciation for each share that was sold.
However, if Jim gave the stock directly to Villanova, he would avoid this
tax on the appreciation and receive, instead, an income tax deduction on the
full value of the stock. What's more, because Villanova University is a
qualified charitable organization, it could sell the stock and avoid any tax
on the appreciation. This is a win/win situation: a win for Jim and a win
for Villanova.
Or:
Let's say Jim decides to give 100 shares of this stock to Villanova (and
designate it to whatever he wished). In making the gift, he would obtain a
charitable income tax deduction of $7,500, even though he only paid $1,500
for these shares originally. If he happens to be in the 31 percent tax
bracket and claims the deduction on his itemized tax return, he could save
$2,325 in taxes -- more than he paid for the stock in the first place!
Many thoughtful donors review their securities portfolio and select those
which have appreciated the most and have been held for more than a year.
These donors give securities instead of cash because they have discovered
the value and enjoyment of stretching their giving power by giving the
appreciation. After all, the more they can prudently give to help the worthy
efforts of Villanova, the better they feel.
If you are considering making a gift from your securities portfolio, it is
important that you arrange for a direct transfer of your securities to Villanova
and not sell (or instruct your broker to sell) the securities first. To assure a
smooth transfer, please contact Janet Duffy, Coordinator of Gift & Pledge
Processing, at 610-519-4573 or e-mail janet.duffy@villanova.edu, and she will be
happy to give you specific instructions.
Closely-held Securities
Gifts of closely-held securities can be made in a way that benefits Villanova
while providing the donor with tax benefits. Gifts of securities that are not
publicly traded will be accepted at the discretion of the University on a
case-by-case evaluation of the conditions affecting the eventual sale of the
securities by the University. Such gifts will be credited at fair market value
as determined by a qualified, independent appraiser secured and compensated by
the donor. If restrictions are placed on the securities by the donor or by the
terms of the securities themselves, acceptance of the gift shall be subject to
prior approval by the University.
Example:
Mary Jones works for a privately-held real estate development company.
She has 2,000 shares of the company, which have been valued at $500 each,
for a total worth of $1 million. She wishes to endow a scholarship for
students from her home town and makes a gift of 200 shares of her company to
the University. The gift is also accompanied by a letter from the company’s
chief executive officer that states that she may make a gift of the
company’s shares. The University then sells the shares to the real estate
development company. There can not be any prior arrangement to make this
transaction between the University and the company. The company pays the
University $1 million, which is then used to establish Mary’s scholarship.
Mary is able to realize a tax benefit in a way that diversifies her
financial holdings, and a student with financial need from her home town is
able to attend the University.
Mutual Funds
Donations of mutual funds result in benefits that are similar to donations of
stocks, though the transaction time is often lengthier. If you are making
donations of mutual funds to count during the tax year, it is a good idea to
allow up to six weeks for the transaction. Shares of mutual funds will be
credited at the net asset value of the shares on the gift date.
If you are considering making a gift from your securities portfolio, it is
important that you arrange for a direct transfer of your securities to Villanova
and not sell (or instruct your broker to sell) the securities first. To assure a
smooth transfer, please contact Janet Duffy, Coordinator of Gift & Pledge
Processing, at 610-519-4573 or e-mail janet.duffy@villanova.edu, and she will be
happy to give you specific instructions.
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