If you have marketable securities that have grown substantially in value, the tax laws make it possible for you to make an important gift at a remarkably low after-tax cost.

A gift of appreciated securities generally qualifies you for an income tax charitable deduction equal to the value of the gifted securities, and it may also avoid the long-term capital gain tax on your unrealized capital gain. You can deduct up to 30% of your adjusted gross income in the year of your gift. Any amount given in excess of 30% can be carried over and deducted for up to five subsequent years.

Usually, a sale of appreciated securities results in a tax on your full gain--in other words, you keep only part of the profit. But if you give those same appreciated securities to the Library, there is no tax on your gain, even though your “profit” is counted as part of your charitable deduction.

Note: it is nearly always better for a donor to gift the securities outright, as opposed to selling a stock and giving the proceeds of the sale to a charity. 

Example of a Gift of Securities and Hypothetical Tax Advantage of Giving Stock
Five years ago, Mr. Jones purchased 100 shares of WAYGOOD Co. stock at $5 per share for a total of $500. The company has done very well and his 100 shares are now worth a total of $2,500. He consults his financial advisor and decides to donate his stock to the Library. Mr. Jones, who is in the 28% tax bracket, avoids a total of $1,000 in taxes and feels that he has made a significant difference towards helping the Library fulfill its mission.

Tax Savings, Cash vs. Stock Gifts	Cash	Stock
Gift Amount	$2,500	$2,500
Charitable Deduction	$2,500	$2,500
Income Tax Savings (28% Bracket)	$700	$700
Capital Gain Tax Savings	$0	$300
Total Tax Savings	$700	$1,000
"Cost" of Gift	$1,800	$1,500