Giving Securities

Giving Securities…it could be a win-win situation:

If you have decided to make a gift to the Sisters of the Immaculate Heart of Mary of Wichita, it could be advantageous for you to give appreciated securities instead of cash.

Giving appreciated securities may be a terrific way for you to make a gift without having to pay capital gain taxes on the appreciated value.  Typically, if you have owned the securities long enough to qualify for long-term capital gain treatment, you could be entitled to claim a charitable deduction for Federal Income Tax purposes equal to the fair market value of the securities on the date of the gift, subject to a limitation of 30% of your contribution base (adjusted gross income computed without regard to any net operating loss carryback).  You may carry forward any unused deduction in excess of the limitation for a maximum of five ensuing years.  State laws concerning deductibility of charitable gifts vary, and you should consult your own tax advisors to determine the effect of state law in your case.

Some donors give appreciated securities and then purchase similar securities with the cash they would otherwise have used to make the gift.  In this manner, donors are able to make a significant gift, receive a charitable deduction for the full value of the securities transferred and obtain a new, higher basis for the purchased securities.

Donors are encouraged to consult with their own advisors to make certain the securities selected for a gift will be of the win-win type described above.   For example, in most cases it would not be advisable to donate securities that are worth less than their original cost.  In this case, it would usually be more advantageous to sell the securities, deduct the loss, and make a gift out of the sales proceeds.  Also, in some circumstances, gifts of appreciated securities can give rise to Alternative Minimum Tax (AMT) treatment because the untaxed appreciation is a “tax preference item” for purposes of calculating AMT – your advisor can help you with this analysis also.  In most cases, AMT will not be an issue, but donors are encouraged to consult with their own advisors.

How To Give Securities

It is not necessary to transfer securities into the Sisters of the Immaculate Heart of Mary of Wichita’s name.  Doing so can cause excessive delay and the stock could decrease in value during this process.

If the stocks are in your possession, you can mail them safely first class to:

The Sisters of the Immaculate Heart of Mary of Wichita

Attn:  Mother Mary Magdalene O’Halloran, IHM

3550 N. 167th St. W.

Colwich, Kansas 67030

Endorse the certificates over to the Sisters of the Immaculate Heart of Mary of Wichita by writing this on the assignment line on the back of the certificates and sign exactly as your name appears on the face.  A signature guarantee is not required.  The certificates are then negotiable only by an authorized officer of the Sisters.  If a certificate represents more shares than you intend to give, simply include written instructions for the Sisters to keep a specified number of shares and a certificate representing the balance will be reissued to you.

If you hold the securities with a brokerage, custody, trust or agency account, notify your broker or banker, in writing, that you are giving a specified number of shares to the Sisters of the Immaculate Heart of Mary of Wichita.  Instruct them to transfer those shares to the Sister’s brokerage account pending instructions from the Sisters.  Your broker or banker should notify the Sisters of the Immaculate Heart of Mary of Wichita about the transfer by calling (316) 722-9316.  Instructions for the transfer of the securities will be issued promptly.

If the date of the gift is important to you (for example, end of the year), the date of receipt of the gift by delivery is important to keep in mind.  If you deliver the stock in person to the Sisters, the date of the gift is the date of delivery.  If you mail the stock certificates using the United States Mail to the Sisters, the date of gift is the postmark date.

If you re-register the securities into the Sister’s name, the date of gift is the date upon which the company enters the registration upon its books.  This may pose excessive delays.

If you transfer the securities to the Sisters through a brokerage account or depository, the date of the gift is the date upon which the securities are placed in the Sister’s account.

Please note:

  • If the securities are restricted in any manner, the Sisters will need to know the type of restriction and any additional information pertaining to the restriction.
  • Donors who contribute securities in excess of $500 should complete a copy of the I.R.S. Form 8283 to be filed with their Federal Income Tax returns.
  • If the securities are not traded on a public exchange, an appraisal may be required to substantiate the Federal and State Income Tax charitable deductions.

 

Ideally, you should send the Sisters a copy of the instruction to the broker/banker along with a notification of the purpose for which the gift is to be used.

Your gift to the Sisters of the Immaculate Heart of Mary of Wichita has enormous impact.  There are many ways to make your gift, and giving appreciated securities is just one way in which you could make a difference to the Sisters.