Donate Your Stock. Buy It Back. Lower Your Tax Bill?
If you already give to charity, consider giving appreciated stock instead of cash. Say you bought shares for $500, held them for more than a year, and they’re now worth $1,000. Selling would realize a $500 capital gain. But transferring those shares directly to a charity that accepts stock—or to a donor-advised fund—lets you contribute the full $1,000 without realizing that gain yourself.
Here’s the part people often overlook: if you still want to own that investment, you can use separate cash to buy new shares. The new shares have a cost basis equal to what you paid—in this example, $1,000. You’ve supported charity and continued investing in the same stock, while giving away the original shares and their built-up gain.
This strategy starts with a decision to give. Contributions to a donor-advised fund are irrevocably committed to charity, and whether you receive a charitable deduction depends on your tax situation. If giving is already part of your plan, explore our free Charitable Giving Strategy Finder to see which approaches may fit your circumstances.
