Submitted By: David
Answered: August 10, 2015 11:26 am

Can I donate appreciated securities to a donor-advised fund and deduct their value?

A donor-advised fund is a program that lets you donate cash and certain property now—and take a current charitable contribution deduction—while having funds disbursed to a charity in the future. The donor can recommend, but not compel, disbursements to particular charities. For tax purposes, first determine whether the fund you use will accept the securities. Most will accept publicly-traded stock and other securities with a readily ascertainable value. Then, for purposes of the amount of the deduction, determine whether you’ve held the stock long-term (more than one year). If the stock has been held for a shorter period, you do not get to deduct the stock’s fair market value as of the date of the donation.

Tax Glossary

Nonperiodic distributions

A 20% withholding rule applies to nonperiodic distributions, such as lump-sum distributions, paid directly to employees from an employer plan.

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