Best Tax Preparation Services in Freehold, NJ

Stock donation benefits and how does it work?nnWhen you donate stock to charity, you generally don’t have to pay capital gains, and you can take an income tax deduction for the full fair-market value (FMV). It can be up to 30% of your adjusted gross income (AGI). And since you are donating stocks, your contribution and tax deduction may instantly increase by 15-20% (Long Term) or your tax bracket % (Short Term) (please visit IRS for additional info or check with your tax adviser).nnFor illustration purposes, you as an investor have the option to re-purchase back the appreciated stocks that you already donated right after you make your stock donation, by doing so, your new stock purchase will have a (FMV) basis equal to the current acquisition amount on the day of purchase, so technically you will have the same number of stocks for the same dollar amount that have been already donated, with a benefit of no capital gain to capture. In other wards consider donating some of your appreciated shares and then buying new shares to reset your cost basis at the current, higher price. This will reduce your future capital gains tax exposure if the stock continues to grow in value. And if the stocks depreciate in value and you sell you still have the option to offset with future capital gains or take yearly ordinary losses according to IRS threshold amount until capital gains are all used.