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The best property to give to charity

Giving to charity is not only personally satisfying, the IRS (and possibly your state) also rewards you with generous tax breaks.

  • Current income tax deduction if you itemize, subject to certain percentage limitations for any one year
  • Tax benefit received reduces the cost of the donation (e.g., a $100 donation from someone in a 30 percent tax bracket has a net cost of $70)
  • Reduces or eliminates capital gains tax if appreciated property is given
  • No transfer (gift and estate) taxes imposed
  • Removes any future appreciation of the donated property from your taxable estate
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Highly appreciated or rapidly appreciating property*

Such as:

  • Intangible personal and real property (e.g., stock or real estate)
  • Tangible personal property (e.g., art, jewelry)
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Cash
  • Easy to give--the type of donation most charities like best
  • Be sure to get a receipt or keep a bank record, regardless of the amount
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Income-producing property*

Such as:

  • Artwork (if given by the artist)
  • Inventory
  • Section 306 stock (stock acquired in a nontaxable corporate transaction)
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Tangible personal property*

Such as:

  • Cars
  • Jewelry
  • Paintings
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Remainder interests in property

Lets you use the property, or income from the property, until a later date. Gift and estate tax deductions are not allowed unless a trust is used. You may only take the income tax deduction in the year that the gift is actually conveyed.