In
a
year
when
the
major
stock
averages
are
touting
healthy
gains,
investors
may
be
unwilling
to
part
with
their
favorite
companies
–
but
giving
away
some
of
those
winners
could
pay
off.
The
S
&
P
500
is
up
more
than
18%
in
2023,
and
the
Nasdaq
Composite
is
boasting
a
36%
gain.
Just
a
handful
of
tech
giants,
such
as
Meta
Platforms
,
Nvidia
and
Tesla
,
are
driving
much
of
those
gains.
That
also
means
that
if
you’ve
been
carrying
positions
in
those
names,
you
could
end
up
with
some
overconcentration.
But
rather
than
just
selling
out
of
those
stocks
to
help
dilute
those
holdings,
consider
donating
a
few
shares
to
charity.
“Given
the
runup
in
a
lot
of
stocks,
a
lot
of
investors
don’t
want
to
sell
them
because
of
the
gain,”
said
Barry
Glassman,
a
certified
financial
planner
and
founder
of
Glassman
Wealth
Services
in
North
Bethesda,
Maryland.
But
giving
some
away
cuts
the
size
of
the
position
in
a
portfolio
and
skirts
capital
gains
taxes.
“This
is
a
great
way
to
consider
reducing
the
holding
while
getting
a
tax
benefit
as
well,”
said
Glassman,
who
is
also
a
member
of
CNBC’s
Financial
Advisor
Council.
Brenna
McLoughlin,
CFP
and
senior
advisor
at
Wealthstream
Advisors
in
New
York,
has
been
discussing
this
very
issue
with
a
client
who
has
positions
in
Nvidia
and
Eli
Lilly.
Those
stocks
are
up
more
than
200%
and
62%,
respectively,
this
year,
and
are
good
candidates
for
some
charitable
giving,
she
said.
“Any
of
those
seven
[stocks
that
are
driving
the
S
&
P
500’s
gains]
are
prime
for
giving,”
McLoughlin
added,
referring
to
the
so-called
Magnificent
Seven
of
Meta,
Nvidia
and
Tesla,
plus
Apple
,
Microsoft
,
Alphabet
and
Amazon
.
Investors
are
encouraged
to
get
to
know
the
charitable
giving
deduction.
This
break
is
available
to
taxpayers
with
itemized
deductions
that
exceed
the
standard
deduction
of
$13,850
in
2023,
if
single,
and
$27,700
if
married,
filing
jointly.
Giving
pays
Donors’
tendency
is
to
give
cash
to
their
favorite
charities,
particularly
during
this
time
of
year.
However,
an
outright
donation
of
appreciated
stock
could
be
a
more
tax-efficient
way
to
do
a
good
deed.
That’s
because
if
you
were
to
sell
your
stock
to
generate
cash,
you’d
be
subject
to
a
capital
gains
tax
on
the
appreciation.
If
you
donate
an
asset
that
you’ve
held
for
more
than
a
year
and
you
itemize
deductions
on
your
taxes,
you
can
generally
deduct
its
fair
market
value.
There
are
limits
to
how
much
you
can
claim
in
a
given
year.
If
you’re
donating
stock
to
a
public
charity,
you’re
capped
at
a
deduction
of
up
to
30%
of
your
adjusted
gross
income.
“Cash
is
the
easiest,
but
not
the
most
efficient
way
to
give,”
said
Tim
Steffen,
certified
public
accountant
and
director
of
advanced
planning,
private
wealth
management
at
Baird
in
Milwaukee.
“By
giving
$10,000
in
stock
versus
$10,000
in
cash,
you’re
making
a
capital
gain
go
away.”
Finding
the
right
winners
for
giving
To
get
the
greatest
benefit
from
charitable
giving,
investors
should
be
sure
to
donate
holdings
with
a
lower
tax
basis
–
that
is,
your
original
investment
in
the
asset.
These
are
holdings
with
the
largest
unrealized
gain,
which
would
otherwise
generate
a
hefty
tax
bill
if
you
were
to
sell
those
positions.
You
can
also
do
this
with
mutual
funds
if
you
have
multiple
tax
lots.
“You
can
give
your
broker
or
advisor
instructions,”
said
Steffen.
“Be
specific
and
tell
them
to
give
away
the
shares
you
bought
on
that
particular
date
with
this
basis.”
Investors
can
also
simplify
their
charitable
giving
by
making
direct
gifts
of
appreciated
assets
to
a
donor-advised
fund.
These
accounts
can
receive
an
array
of
assets,
spanning
from
cash
to
stocks
and
even
cryptocurrencies.
Investors
who
contribute
to
a
donor-advised
fund
can
take
a
charitable
deduction
right
away
and
spread
out
their
grants
as
they
see
fit.
“We
go
into
the
portfolio,
see
which
position
has
the
largest
unrealized
gain,
and
make
that
contribution
to
the
donor-advised
fund,”
said
McLoughlin.
Donor-advised
funds
also
make
it
easy
for
investors
to
bunch
deductions
–
meaning
they
can
pile
several
years’
worth
of
gifts
into
one
year
to
collect
the
tax
break.
“You
might
make
two,
three
or
four
years
of
charitable
contributions,
give
them
in
2023
and
over
the
next
few
years
dole
out
the
dollars
from
the
donor-advised
fund,”
said
Glassman.
