Making the Most of the Market
The stock market has had a remarkable run the past few years, leading many investors to wonder whether it might be time to sell some of their holdings. Another option for charitably minded alumni and friends? Transferring their hot stocks to the Naval Academy Foundation to make a tax-advantaged gift in support of the Brigade of Midshipmen.
Gifts of appreciated securities which have been owned long-term (more than one year and one day) receive a current year tax deduction for the fair market value of the gift, and may eliminate the capital gains tax liability on the sale of the asset. Donors can make a gift at a lower cost than writing a check, or they can make a bigger gift than they might have thought possible.
Ed Chapline '48, who is married with three adult children, began making contributions in support of the Academy about 25 years after his graduation, as his participation in other forms of alumni engagement, including reunions and football games, increased.
"Sometimes the further you get away from a place, the more you realize how much you love it," Chapline says.
He has been a President's Circle donor since the 1995 inception of the Naval Academy Foundation's leadership giving society and is also a member of the Robert Means Thompson Society, which recognizes those who have included the Naval Academy Foundation in their estate plans and through life-income gifts.
Chapline is a strong advocate of using a variety of instruments for charitable giving. Many of his personal contributions to the Naval Academy have come via transfers of appreciated stock.
"A substantial portion of our charitable gifts are of appreciated stock. It's basically discounted money—it's worth more than I originally invested in it, and I can save on the capital gains tax I would owe if I sold it outright. And if donors want to retain their position in the donated stock, they can buy additional shares at a higher tax basis with the funds saved through their reduced capital-gain taxes," he says. "A lot of people may not realize giving this way is an option. It can even be easier to ask their broker to execute a stock transfer than to write a check to an institution directly."
To receive a current year income tax deduction, alumni are encouraged to make gifts of stock by the middle of December to allow time for transfers to be completed by year end. Instructions for making gifts of appreciated stock are available on the Foundation website, or by contacting Patti Bender at 410-295-4186 or firstname.lastname@example.org.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.