2. Donate the securities. If you were planning to sell the equity investments and donate the proceeds via check to a charity, consider donating the stocks or stock funds directly to your chosen charity. Most charities these days accept such donations, which aren’t subject to capital gains taxes and which also can mean an extra deduction on your tax bill. “Some charities need time to do the paperwork, so the sooner you can do the donation in December, the better,” says Mr. Balasa, who suggests making such a move this week rather than closer to the Christmas holiday.
3. Sell losers along with your winners. While it may be hard to find stock losers in a year like this one, that’s not to say that you may not have incurred losses somewhere in your portfolio. With this strategy, you’d sell stocks, bonds, gold or other investments that you’ve lost money on. “There are some asset classes that did take it on the chin in 2013,” Mr. Balasa points out. Then, you could use those capital losses to help offset the capital gains on your tax bill.
So what’s on my to-do list? I especially like option #2. As the year draws to a close, many of us are thinking about getting those last charitable contributions in before the ball drops in Times Square. If you’re like me, though, you’re used to just taking out the checkbook and writing checks. Mr. Balasa’s tip is a reminder that there can be some advantages to donating appreciated stock instead.
Sue Thompson, CIMA, Managing Director, is Head of the Registered Investment Advisor Group, overseeing the firm’s iShares and 529 sales efforts with registered investment advisors, family offices and asset managers. Sue is a regular contributor to The Blog. You can find more of her posts here.
Source: Mark Balasa, BlackRock