If assets have been owned for more than 12 months and appreciated in value, they generally result in long-term capital gains tax. When transferred as a gift, these long-term appreciated assets (1) give the donor a charitable income tax deduction for the full market value of the asset and (2) avoid the capital gains tax that would have occurred if the donor had sold the asset.
Example
A Foundation supporter has a strong interest in education and the benefits of gardening for individuals of all ages. The donor gives $100,000 in appreciated stocks that have been held for a long time and which have a cost basis of $10,000.
| Charitable gift | $100,000 |
| Federal income tax savings ($100,000 x 25%*) | - $25,000 |
| Federal capital gains tax avoidance ($100,000 - 10,000) x 15% | - $13,500 |
| MI income tax avoidance ($100,000 - 10,000) x 3.9% | - $3,915 |
| Estimated net cost to the donor | $57,585 |
Benefit to the Foundation
The $100,000 donation could be used to create an endowment fund with the earnings financing educational programs, including the benefits of gardening, for children and adults at the Frederik Meijer Gardens & Sculpture Park.
* Individual federal income tax rates vary.
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Join the Perennial Society
The Perennial Society is made up of individuals who have made a provision in their wills or estate plans for a deferred gift of $10,000 or more to the Foundation.
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Federal Tax ID (EIN)
Tax ID: 38 3118579
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The alternatives described are meant to provide general guidance. They may be subject to technical rules that could affect their use by a donor. You need to consult with your own advisor or a FMG&SF representative to determine which technique is best for you.
