Financially Savvy Kittens on Gifts to Charity

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This kitten gifts appreciated stock.Kittenomics #4

Buying a stock when the price is low, maintaining it during it’s rise to profits, and then selling it at its height is often viewed as the stock market dream. However, that dream is dampened by a capital gains tax of  15% (scheduled to go up to 25% in January 2013) on the difference between the time you bought the stock and sold the stock.

To avoid this 15% loss, this kitten uses his most appreciated stocks, those stocks which normally would have the most money lost to capital gains tax, and uses them as his gifts to charity.

If this kitten were to write a check to a charity, he would have to sell the stock and, after capital gains, only 85% (or 75% come January) would make it to his choice charity. But, when he gifts the stock to the charity without selling the shares, he gets the value as a tax deduction and the charity doesn’t pay any taxes on it when they sell the stock. As a result, 100% of the value gets gifted. Now that’s smart and generous gifting.

Way to go, kitten!

Read all the Kittenomics here!

To read more about this topic check out Charitable Gifting: How to Choose Appreciated Stock

Photo of this two week old Burmese taken by Mikael Tigerström and used here under Flickr Creative Commons.

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Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 800 financial articles and is known for her expertise on tax planning.

2 Responses

  1. Megan Russell
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    Nerdy Finance #18 featured this post, writing “OMG IT’S A KITTEN.” Luckily for him, financially savvy kittens are not such a rare breed. Perhaps he’ll be able to find one of his own.

  2. Megan Russell
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    This post also featured in Carnival of Wealth, Only 14 Shopping Days ‘Til Christmas Edition. The carnival writes:

    We like investing. We like kittens. Do they go together, or will this be like combining sex with sriracha sauce? Let’s find out with this post from Megan Russell at Marotta on Money, an old CoW entrant with a new site. The post is less about kittens than it is about minimizing capital gains taxes, and we swear to God if we hear someone use “gift” as a verb one more time we might have to drown a couple of kittens to illustrate our anger, but this post stands on its own.

    Luckily for him, the kittens are too sweet to take offense at his implication that they are incompatible with investing and would love to give him a lesson in gifting, a verb they have a lot of experience with.