Give stock, save on taxes, says survey

Ten to 20 million households have the potential to realize additional tax savings of $2.2 to 4.5 billion by donating securities with long-term appreciation instead of giving cash to charities, according to an analysis on charitable giving by Fidelity Investments of Boston. These are savings in addition to those a donor receives from lowering their income taxes by making the donation. Examining the data collected from a random sample of 50,000 Fidelity investors with brokerage accounts, Fidelity found that in households with at least $25,000 in securities, more than 90 % could donate $10,000 in securities with long-term appreciation. Based on available IRS data for tax year 2004, the median federal tax savings was $449. Furthermore, a survey of 508 randomly selected investors with at least $100,000 in investible assets and found that 68% were not aware of the additional tax advantages of donating appreciated securities. A full 39% said they did not want to give up their high-performing securities, not realizing that they can repurchase them. Others cited too much paperwork or that donations are too numerous or too small as barriers to donating securities. Only three percent of the charitable donors surveyed with $100,000 in investible assets use donor advised funds, the report said. The majority – or 86% -- reported that they had not heard of or knew little about donor advised funds. Fidelity Investments has custodied assets of $3.3 trillion as of Sept. 30.