|Utilizing securities that have appreciated in value to fund charitable gifts is one of the most effective means of benefiting charity while obtaining considerable income tax advantages. If an individual sells a stock or bond that has increased in value, he will be subject to a tax on that capital gain. Because a public charity is not subject to income taxation, it can sell either of those securities without being subject to the capital gains tax.
How does one transfer stock to charity? It depends on how you currently hold the stock.
If you hold the stock certificate, the gift can be completed two ways:
By Mail: The stock certificate, along with a letter of instruction regarding the purpose for which the gift is to be used, may be mailed to the following address:
Office of Planned Giving
P.O. Box 750305
Dallas TX 75206
By Hand Delivery: The stock certificate, along with a letter of instruction regarding the purpose for which the gift is to be used, may be delivered by hand to the following address:
Office of Planned Giving
6200 N. Central Expressway, Suite 2060
Dallas, Texas 75206
If the stock is held in a brokerage account, the gift can be transferred electronically.
SMU maintains accounts at several major brokerage houses and if SMU has an account at the same broker as you, the stock can be transferred internally. Often this is the most efficient way to transfer your stock electronically. Please contact the Office of Planned Giving+ at 214-768-3410 to determine whether SMU holds an account at the same brokerage house.
Transfers can be made into SMU's main brokerage account from any account in the country by using the following instructions:
Account # 304-88446
RBC Wealth Management
DTC # 0235
Contact: Bobby Leach at 972/612-4266
Determining the Value of the Gift
In addition to avoiding the capital gains tax, a charitable gift of securities held for more than one year entitles the donor to an income tax deduction equal to the value of the security at the time it is given to charity. However, determining the value of the gift to charity when the gift is made with securities is not as simple as it would be if the gift were made with cash. The Internal Revenue Service Regulations state that the value of the gift for income tax purposes is determined on the date the gift is completed and is equal to the mean of the high and low of the values traded on that date.
Generally, the gift is complete when it has been irrevocably transferred by the donor and comes under SMU's custody and control. When mailed, the gift is complete when it is postmarked. When hand delivered, it is complete when received by an SMU representative. When transferred electronically, the gift is complete when it arrives into SMU's brokerage account.
Gifts of Mutual Funds
The process of giving mutual fund shares can vary by company, so please contact the Office of Planned Giving at 214-768-4745 for specific instructions.