Give First, or Sell First Then Give
Agape is now able to accept material gifts in partnership with IDonate. Please visit our IDonate website to learn more!
Scenario A shows the wisest choice.
(A) The giver donates an appreciated non-cash asset before the sale, thereby taking a $500,000 income tax deduction and receiving a $205,000 reduction in taxes.
(B) The giver sells an appreciated asset first, and then gifts the proceeds to us, thereby taking a $405,500 income tax deduction and receiving a $166,255 reduction in taxes.
| Scenario |
Gift to charity |
Gift to |
Income tax deduction |
Value of charitable income tax deduction at 41% |
Out-of-pocket cost to make the gift |
| A. Gift asset before sale |
$500,000 |
$0 |
$500,000 |
$205,000 |
$295,000 |
| B. Sell asset, then gift proceeds |
$405,500 |
$94,500 |
$405,500 |
$166,255 |
$333,745 |
| *Assumptions: 35% Federal, 6% State tax rates, $50,000 asset basis, $500,000 fair market value (FMV), donor held asset over one year and gives 100% of interest | |||||
So how can we serve you? Agape Unlimited partners with IDonate.com and would be honored to explore how we can help you give in new, creative, and tax-smart ways. Please visit our IDonate website to learn more!
“Scenario reprinted with permission from National Christian Foundation, Copyright 2011.”