There are other items to consider before you make a move.
Find out whether your charity of choice has ability to accept donated securities, and if so, what types of securities can it accept, Hook said. For publicly traded stocks, bonds, mutual funds and ETFs, the charity has to have a brokerage account to accept the donated securities. (If not, consider a donor-advised fund. More on that in a moment.)
Plus, Hook said, only appreciated securities should be given.
If an investment has an unrealized loss, you are better off selling the investment, taking the capital loss and gifting the proceeds from the sale, he said.
Also only give investments that you have held for greater than one year.
“The value of the tax deduction for donating investments held for one year or less that would create a short-term gain is the original cost of the investment and not the fair market value,” Hook said. “I recommend specifically identifying which shares to donate to ensure the proper valuation.”
Otherwise, he said, you could end up with an adverse tax result.
If you’re considering giving privately held securities, such as shares in a closely-held business, a valuation needs to be done to determine the fair market value. This can be costly, Hook said.
And finally, remember that the limit for how much can be deducted in one year for gifts of appreciated securities is lower than it is for gifts of cash. For 2018, a donor can deduct as much as 60 percent of their AGI as a charitable deduction on their tax returns. But you can only gift appreciated stock worth 30 percent of AGI.
If the appreciated securities donated exceed the AGI limit, the excess amount is not lost but can be carried over for five tax years, Hook said.