For information on gifting appreciated stock to an individual, click here.


General Information

Donating appreciated stock to charity is a tax efficient way to fulfill your charitable intentions while minimizing income tax to yourself. The donation can be made directly to a charity or through a Donor Advised Fund (discussed later).

This strategy applies to securities, such as stocks, mutual funds, and exchange traded funds that have increased in market value since initial purchase.  This strategy allows a donor to (1) donate shares of appreciated stock to a qualified charity without realizing built-in capital gains, and (2) claim an itemized tax deduction equal to the market value of the donated shares (subject to limitation due to basis or AGI).

Donations in excess of $500 are reported as a non-cash donation on Federal Tax Form 8283 of your annual 1040 tax filing.


Donor-Advised Funds (DAF)

A Donor-Advised Fund (DAF) is a 501(c)(3) charitable organization funded and controlled by you. Once stock is donated/contributed to the DAF, the stock is liquidated to cash and can be granted by you in various amounts to various charities located in the United States. Because the DAF is recognized as a qualified charitable organization by the IRS, your donation can be claimed as a federal itemized deduction. Also, because the appreciated stock is liquidated within the DAF, you realize no capital gains on the sale.  

It’s a great opportunity for you to rebalance a portfolio without realizing capital gains. Plus, fulfill your charitable intentions.

Want to know more? Visit the pages below to learn more about Schwab Charitable DAFs and watch a How-To Video Series for Donors.