It’s easy to contribute stocks and mutual funds through Simple Church.

When you contribute appreciated securities:

• you receive an immediate tax deduction* for the full amount of the securities value on the transfer date if the securities were held for more than one year,
• you pay no capital gains tax,
• you can designate your gift to a specific fund just like a cash contribution. Consider the following two simplified scenarios illustrating the difference between contributing stocks directly to Simple Church versus selling the stocks and contributing the cash proceeds to Simple Church.

Scenario #1

• Sam purchased 200 shares of ABC Corporation ...............................
• The value of the shares appreciated over a few years ......................
• Total value of the 200 shares ............................................................
• Sam contributes the 200 shares to build an orphanage in Myanmar
• The amount of capital gains Sam must claim ....................................
• The amount of capital gains tax Sam must pay .................................
• The amount of tax deduction Sam can claim on this year’s tax return

Scenario #2

• Dan purchased 200 shares of ABC Corporation ...............................
• The shares appreciated over a few years ........................................
• Total value of the 200 shares ...........................................................
• Dan sells the shares and collects the cash proceeds .......................
• Dan contributes the cash to build an orphanage in Myanmar ..........
• The amount of capital gains Dan must claim ...................................
• The amount of capital gains tax Dan must pay ................................
• The amount of tax deduction Dan can claim on this year’s tax return

$10,000
$5,000
$15,000
$15,000
-$0-
-$0-
$15,000

$10,000
$5,000
$15,000
$15,000
$15,000
$5,000
** $750
$15,000

Sam and Dan both have the joy of providing a home for 30 to 40 homeless orphans, and they are both able to claim a tax deduction of $15,000. However, Dan paid $750 in taxes because he sold his shares and contributed cash, while Sam directly contributed his shares to Simple Church and avoided paying capital gains taxes.

NOTE:

• If securities are held for less than one year at the time of the contribution, the tax deduction is generally limited to the original cost of the securities.
• If the securities depreciate in value, it is beneficial to sell the securities, contribute the cash proceeds obtaining a tax deduction, and then claim the investment loss on the contributor’s tax return.

* up to 30% of your adjusted gross income with a five-year carryover of any remaining amount

** the 2009 long-term capital gains tax rate is 15% but it is expected to increase in 2010 or 2011

To find out more about contributing stocks or mutual funds, email Lori at Simple Church and she will send you the information you need to get started.