When it comes to travel, almost all of us now rely on GPS—global positioning systems—to help us reach our destination. Many of us wonder how we ever got along without it.

Those who have charitable goals often find themselves on a journey of their own. As they seek the best route to make a significant difference for the organizations they support while optimizing the personal benefits their gifts produce, many have come to rely on a different kind of GPS: Gift Planning Savvy. Creativity mixed with a little study can help them avoid a lot of bumps in the road.

Gift planning savvy starts with deciding how you will fund your charitable gift. While the final choice depends on careful analysis, stocks and other securities often raise intriguing considerations for those who own such assets and can influence the “exit ramp” your charitable GPS suggests:

Exit 1. Appreciation Avenue—If you own stock that has gone up in value, GPS will tell you to get off the “Investment Interstate” here by funding your gift with your stock IF you have owned it for more than one year. If you have, you can take a deduction for the full, current fair-market value of the stock. You will not be taxed on any of the appreciation on your investment. Even if you don’t itemize deductions on your tax return, you still benefit from avoiding tax on the appreciation. Because the recipient charity is tax-exempt, it will have no tax consequences when it sells the stock.

Exit 2. Reinvestment Road—If you believe the stock has significant upside potential, you can simply repurchase it after making your gift. You still get the benefits noted above plus, if and when you sell in the future, any gain you have at that time will be measured against the cost of repurchasing it, not your cost for the stock you used to make your gift.

Exit 3. Depreciation Drive—If your stock investment has gone down in value, get off here. Instead of using your stock to fund your gift, you will want to sell the stock and realize a loss. By selling at a loss, you can use that loss to offset other gain you may have from other investments. If you don’t have gain—or have gain in an amount less than your loss—you can deduct up to $3,000 against other income on your tax return. You can then use the proceeds of the sale to fund your gift.

CAVEAT: Purchasing the same stock too close to the date you sell it—either before or after the sale—can negatively affect your ability to recognize the loss. Check with your investment advisor for the specific timing on such transactions.

We would welcome the opportunity to discuss your options for making gifts to support our mission. Simply contact our office to arrange a time that is convenient for you.