Gift of Appreciated Securities

A Tax-Savvy Way to Benefit from Growing Assets

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Securities and mutual funds that have increased in value and been held for more than one year are popular assets to use when making a gift to the University of Pittsburgh. Making a gift of appreciated securities or mutual funds offers you great tax advantages while supporting the mission of the University.

When you donate appreciated securities or mutual funds, you can reduce or even eliminate federal capital gains taxes on the transfer. You may also be entitled to a federal income tax charitable deduction based on the full market value of the securities at the time of the transfer.

Securities are most often used to support our work in the form of:

An outright gift. When you donate securities to the University of Pittsburgh, you receive the same income tax savings that you would if you wrote a check, but with the added benefit of eliminating capital gains taxes on the transfer, which can be as high as 20 percent.

A transfer on death (TOD) account.* By placing a TOD designation on your brokerage or investment account, that account will be paid to one or more persons or charities after your lifetime.

An Example – Benefits of Contributing Appreciated Assets Directly to Pitt versus Selling the Assets and Contributing the Proceeds or Donating Cash:

Bought 100 shares of Coca-Cola stock in October 1993 at $10/share = $1,000.
Sell or donate the same 100 shares in September 2019 at $54/share = $54,000.

If you contribute the stock directly to the University of Pittsburgh, your charitable income tax deduction is for the full market value, $54,000. In addition, you will not be liable for tax on the $53,000 in capital gains. If you are in the 37% income tax bracket, that could lead to a total tax savings of $30,580 (Income tax savings $19,980 + Capital gains tax avoidance $10,600).

If you sell the stock and contribute the proceeds to the University of Pittsburgh, your capital gain is $53,000 which can be taxed as high as 20%. If you were to put aside the monies needed to pay that capital gain tax from the sale proceeds, your charitable gift to Pitt would be $43,400 and the tax savings of that charitable gift (based on a 37% income tax rate) would be $16,058.

If you contribute $54,000 cash rather than using your appreciated assets, you would be eligible for an income tax savings of as much as $19,980 (based on a 37% income tax rate), but you would not enjoy any capital gains tax savings.

Appreciated Securities

Additional ways to use appreciated assets to fund your gift:

*State laws govern transfer on death accounts. Please consult with your bank representative or investment advisor if you are considering this gift.

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Gifts That Pay

Your payments depend on your age at the time of the donation. If you are younger than 60, we recommend that you learn more about your options and download this complimentary guide Deferred Gift Annuities: Plan Now, Benefit Later.

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Next Steps

  1. Contact us for additional information on appreciated securities.
  2. Download the factsheet.
  3. Seek the advice of your financial or legal advisor.
  4. If you include the University of Pittsburgh in your plans, please use our legal name and federal tax ID.

Legal name: University of Pittsburgh of the Commonwealth System of Higher Education
Address: 4200 Fifth Avenue, Pittsburgh, PA 15260
Federal tax ID number: 25-0965591