Strategic Giving: The Power of Appreciated Stocks and Securities
Donating appreciated stocks, bonds, or mutual funds is one of the most tax-efficient ways to support Barrow Neurological Foundation. By gifting the asset directly, you can bypass the “tax trap” of capital gains while maximizing your philanthropic footprint in neuroscience.
The Double Tax Benefit of Gifting Stock
When you sell an appreciated asset, you are typically taxed on the profit. When you gift that same asset to Barrow Neurological Foundation, you receive a two-fold advantage:
- Eliminate Capital Gains Tax: You pay $0 in capital gains tax on the appreciation of the shares.
- Full Fair Market Value Deduction: You receive a charitable income tax deduction for the full value of the shares on the date of the gift (provided you have held them for over a year).
Comparison: $10,000 Cash Gift vs. $10,000 Stock Gift
Assumes a 15% capital gains tax rate and a stock purchased for $1,000.
| Feature | Donating $10,000 Cash | Donating $10,000 Stock |
| Gift to Barrow | $10,000 | $10,000 |
| Tax Deduction | $10,000 | $10,000 |
| Capital Gains Tax Paid | $0 | $0 |
| Tax Savings (Capital Gains) | $0 | $1,350 Saved |
2026 Tax Rules for Securities
Starting in 2026, new thresholds apply to charitable deductions. Under the current tax code:
- Deduction Limits: Gifts of appreciated securities are generally deductible up to 30% of your Adjusted Gross Income (AGI).
- The 0.5% Floor: Itemizers can only deduct the portion of their total charitable giving that exceeds 0.5% of their AGI. This makes “bunching” multiple years of stock gifts into a single year a highly effective strategy for 2026.
How to Initiate a Stock Transfer to Barrow
Gifting securities is a simple process that involves a DTC (Depository Trust & Clearing Corporation) transfer.
- Identify the Shares: Choose shares held for more than one year with the highest appreciation.
- Contact Your Broker: Instruct them to transfer the shares to Barrow Neurological Foundation.
- Provide Technical Details: Use our Tax ID #: 86-0174371. (Specific broker accounts and DTC numbers can be found at barrow.mygiftlegacy.org).
- Notify Us: Since broker transfers often don’t include donor names, please let us know to expect the gift so we can acknowledge it properly.
Frequently Asked Questions
What if my stock has lost value?
If your stock is currently worth less than you paid for it (a “capital loss”), it is usually better to sell the stock first, claim the loss on your taxes, and then donate the cash proceeds to Barrow Neurological Foundation.
What is the ‘Double Tax Benefit’ of donating stock?
The “Double Tax Benefit” refers to the two-way financial advantage of gifting appreciated securities:
- Avoidance: You pay $0 in capital gains tax on the profit you would have realized if you sold the stock yourself.
- Deduction: You receive a full-value income tax deduction for the fair market value of the stock on the date of transfer, not just the original price you paid for it. This makes gifting stock significantly more “profitable” for your tax return than donating the same amount in cash.
Does it matter how long I have held the stock?
Yes. To receive the full fair market value deduction, you must have held the securities for more than one year (long-term capital gain property). If you donate stock held for one year or less (short-term), your deduction is limited to the lesser of the fair market value or your original cost basis. For maximum impact, we recommend gifting your most highly appreciated long-term holdings.
Can I donate mutual funds or ETFs to Barrow?
Yes. Mutual funds and Exchange-Traded Funds (ETFs) are treated identically to individual stocks for charitable purposes. The only difference is the processing time; mutual fund transfers often take 5–10 business days longer than stock transfers because the fund company must manually re-register the shares. We recommend initiating mutual fund gifts at least two weeks before year-end to ensure they are credited to the current tax year.
Take the Next Step in Your Philanthropic Journey
Ready to explore which planned giving vehicle is right for you?
- Explore Our Technical Guides: For detailed gift descriptions, interactive calculation tools, and expert assistance, visit our dedicated gift planning portal at barrow.mygiftlegacy.org.
- Request a Personalized Illustration: See exactly how a gift would look for your tax bracket and estate plan. Contact our Philanthropy Officers today at (602) 406-3041.
- Join the Legacy Society: If you have already included Barrow in your will or trust, please let us know. We would love to thank you today and ensure your gift is directed exactly where you want it to make the most impact.
Barrow Neurological Foundation 100% of every donation goes directly to research and care. Tax ID #: 86-0174371.
