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Stock Donations

Whether your portfolio performance was above market averages or even if you had a decline in your portfolio value, donating stock to Faithful Friends is a wise investment in stopping animal suffering and to bring pet therapy to those in need in our community. Attached is more specific information on how you can save money and how donating stock can help you and Faithful Friends programs!

We are now able to receive a gift of securities into our Merrill Lynch account, 753-04033 and here is how:

  • If you have a Merrill Lynch account, you can instruct your Merrill Lynch Financial Advisor by letter to transfer securities into the Faithful Friends account there.
  • If you do not have a Merrill Lynch account, you will need to instruct your brokerage firm verbally or by letter to transfer the securities through the DTC clearing system, choosing Merrill Lynch’s clearing number of 5198, and further crediting the Faithful Friends account number: 753-04033
  • Once Merrill Lynch receives the gift for Faithful Friends Inc., they will contact us with the name of the security, number of shares and your name.

Save Animals—and Taxes—With Appreciated Stock

If you have stock that you have owned for more than one year, and it has appreciated since you purchased it, you can save on the capital gains tax you would owe if you sold it yourself by donating the stock to Faithful Friends Inc. And since Faithful Friends Inc. is a 501(c)(3) charitable organization, you will be entitled to an income tax deduction for the full current market value of your gift, to the extent allowed by law.

Here is an example: Ms. Feline purchased 100 shares of ABC stock three years ago at $50 per share or $5,000. This stock is now worth $100 per share, or $10,000. If Ms. Feline sold the stock, she would pay capital gains taxes on the $5,000 of appreciation. If Ms. Feline donates the stock to Faithful Friends Inc., she is entitled to a charitable deduction of $10,000 from her taxes and pays no capital gains tax. Plus, you can deduct stock donations equal to an amount of up to 30 percent of your adjusted gross income, and any excess deductible amount can be carried over for as long as five years to offset income or capital gains taxes.

How to Protect the Animals—and Your Investment Portfolio

Another option for using your “long-term” appreciated stock to fight the abandonment and care of animals is to donate the stock to Faithful Friends Inc. and then repurchase the shares on the market, or diversify your assets by purchasing securities of an equal value in different sectors and industries. Not only will you be able to claim a charitable deduction for the full fair-market value of your gift, you will also minimize any capital gains tax when you eventually sell the replacement shares.

Here is an example: Ms. Feline purchased 1,000 shares of XYZ stock three years ago for $3,000. The stock has a current value of $44,000. She donates the 1,000 shares to Faithful Friends Inc. and is thereby able to claim a charitable deduction for the full fair-market value of $44,000 while avoiding capital gains taxes on the profit of $41,000.

Ms. Feline then buys 1,000 shares of XYZ stock for $44,000. If, after holding the replacement shares for more than one year, Ms. Feline decides to sell out and the shares are then worth $50,000, she would pay capital gains taxes on only the $6,000 of profit garnered by the replacement shares rather than the $47,000 of profit that she has made overall on the XYZ stock. The other $41,000 of profit is never taxed.

How to Turn a Stock Market Loss Into a Win

If you took a loss in the stock market, you can still help Faithful Friends Inc.’s programs to relieve animal suffering and to help those in need through pet therapy programs! By selling stock at a loss and then making a donation to Faithful Friends Inc. of the same amount of money that the stock was sold for, you can do the following:

  • Claim a charitable deduction for the gift.
  • Deduct the stock's decrease in value from your other income, thereby reducing the taxes you pay.

You can deduct up to $1,500 if you are single and $3,000 if you are married, but any amount of loss above that can be carried over to future years until completely deducted.

Here’s an example: Ms. Feline purchased 100 shares of XYZ stock three years ago at $50 per share or $5,000, but it’s now worth only $20 per share or $2,000. Ms. Feline doesn’t expect the value of the stock to go up anytime soon. If Ms. Feline were to donate the depreciated stock to Faithful Friends Inc., she could claim a $2,000 deduction. But if Ms. Feline sells the stock and donates the $2,000 cash to Faithful Friends Inc., she can also claim a $3,000 capital loss deduction ($30 loss per share x 100 shares). Assuming that she has no capital gains, she would be able to deduct $1,500 from her income this year (if she is married and filing jointly, she could deduct the complete $3,000) and carry over the remaining $1,500 capital loss to deduct from income or capital gains in future years.

For More Information

As always, we suggest that you consult with your independent financial, tax, or legal advisor for specific help with your particular situation, as Faithful Friends Inc. does not provide financial, tax, or legal advice. But if you would like more information about the various ways in which your stock holdings can be used before year’s end to benefit animals and people in need —and yourself—please contact Michael McCabe, at Merrill Lynch, at 302-571-5144.