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Charitable Stock Gifting: An often-overlooked tax efficiency.

I Peter 4:10 “As each has received a gift, use it to serve one another, as good stewards of God’s varied grace.”

The Lord has been exceedingly gracious and generous in providing for Radius over the last decade as it has grown from the first class of just seven graduates to now having multiple campuses on two continents and graduates working all over the world.  It has been an incredible outpouring of God’s goodness to behold on an annual basis.  The commensurate generosity of the believers who financially support our ministry has been both humbling and encouraging as well… often to a degree that is difficult to ever truly communicate in words.  We are so thankful to those of you who have chosen to sacrifice your time, energy, and finances to pray for us and serve us as we collectively work to “bring about the obedience of faith for the sake of His name among all the nations.” (Rom 1:5b)

Over the years Radius has received gifts in a wide variety of ways, but we wanted to highlight one gifting strategy that is extremely tax efficient… the gifting of appreciated stock.  Gifting stock which has appreciated for more than a year helps the giver to save on taxes twice:

  1. Gifting appreciated stock with a long-term capital gain (meaning it has been owned for at least 366 days) allows the giver to avoid the capital gains tax they would be hit with if they sold the stock and then gave the financial gift.
  2. When you gift appreciated stock you not only avoid the long-term capital gain tax (currently 20% in the US) but you also get the benefit of the tax write-off against your personal income.

So, to some extent it allows US investors to give 20% more than they can if they sell their stock and gift their after-tax dollars.  From an investment perspective, there is actually the potential for a third tax savings in the instance where an investor wants to keep their allocation in the stock they are gifting.  Investors can support Radius while reducing capital gains tax presently and in the future.  We have also seen investors give stock and turn around and replace the shares in the company they are gifting thereby increasing their cost basis and reducing their future capital gains tax burden.

In this vein, we have an established investment account which we have utilized for several years now to accept gifted long term appreciated stock from some of our supporters.  If you would like to take advantage of this strategy going forward, please reach out and we will get you all set up.

I Timothy 7:17-19 “Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.  Command them to do good, to be rich in good deeds, and to be generous and willing to share.  In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.”

Beau Woodward

Beau Woodward

Partner of Woodward Diversified Capital

Beau Woodward is married to his wife Jennifer, and together they have four children: Jackson, Rebecca, Roman, and Chase. Prior to graduating from the Master’s College in 2002, Beau started his career working at Morgan Stanley in Beverly Hills while swimming for the University of Southern California. Beau went on to work at Bank of America, Charles Schwab, and Wells Fargo before launching Woodward Diversified Capital with his brother and father, Gabe and Tom. Beau and Jennifer helped found and launch Sovereign Grace Church of Bakersfield back in 2006, where they still serve as Sunday School teachers to this day. Beau and Jennifer enjoy supporting a few local charities and serving as volunteer coaches and chaperones for their children’s numerous sports and activities. Beau holds a few licenses, the series 7, 66, and 31, as well as his life and health insurance license.