Stock Donation as a Tax Saving Strategy

Investors who have been active in the securities market for past few years are now sitting on substantial capital gains on some stocks. Every trade of these securities results in capital gains tax. If one wants to give charity as zakah or sadaqa, one way is to cash out of appreciated stock and then give charity to balance out the gains as long as deductions are itemized. A better way is to either give stocks directly to a charity or transfer it to a donor advised fund. This way, you get the tax write off without the capital gains. The charity has to be US registered 501c charity which can accept stocks as donations. Below is a Doodly animation which describes the process. This video was developed by Cartoonist Kamran Husain. Visit his website kamranhusain.us for more of his work.