Donating Stock or Mutual Funds

Have you thought about your end-of-year giving? Make a contribution to Congregation Beth Shalom to help support your vibrant, inclusive and joyous community!  

Here are two ways to increase your giving to CBS that may be more tax advantaged for you:  

RMDs from Retirement Accounts

If you’re over age 72, you know that you must take required minimum distributions (RMD’s) from your retirement accounts. What you may not know is that you can make tax-free direct transfers from your IRA (but not Roth IRAs) to charity (i.e., CBS) and have that count as your RMD.

If you’re over 70 and a half, you can transfer up to $100,000 tax-free from your IRA to qualified charities each year.  This transfer is referred to as a QCD, or Qualified Charitable Distribution.  The funds must be transferred directly to CBS (or another charity) so that they will not be considered part of your Adjusted Gross Income (AGI) for tax purposes.

Besides lowering your overall taxable income, keeping your AGI low can also help you to avoid paying higher Medicare premiums, as well as lowering the tax rate on your social security benefits.  

If you are interested in transferring retirement funds to support Beth Shalom, speak to your financial advisor to make sure that you process the transfer correctly.  

Please note that these distributions do not qualify as tax-deductible charitable donations, since they are not includable in your taxable income. However, you do receive the valuable benefit of excluding these amounts from your taxable income.  

Stock and Mutual Fund Donations

Did you know that you can donate your appreciated shares of stocks and mutual funds to the synagogue? You can transfer your appreciated securities to Beth Shalom to satisfy your dues obligations or other donations and pledges, including those for the High Holidays and annual fundraiser.  The process is simple and quick, the cost is  zero, and bookkeeper Emma Shusterman will be happy to assist you with the transaction.  

Your charitable donation is equal to the value of the shares at the time you transfer them, and in addition, because you are donating rather than selling the shares (CBS does the selling immediately upon receipt of the shares), you pay no capital gains taxes!  This is a rare situation where you receive two tax benefits at the same time — a charitable deduction as well as avoiding tax on the appreciation in value of the donated shares. 

Even if you no longer itemize your deductions because the standard deduction has increased in recent years, avoiding tax on capital gains is still a very valuable benefit.  Let Uncle Sam reward you for supporting your sacred community!

Just a couple of caveats: you can only donate stock and mutual fund shares that you've held for more than a year, and the proceeds can only be applied toward tax-deductible items like dues, donations and pledges, and not tuition payments.  Finally, it would not be beneficial to donate shares that have not appreciated — if that is the case, you would sell the shares first, then donate the proceeds.

The process of donating shares is simple and quick, but it does take some time to process. To be sure that your stock donation is completed in the 2025 calendar year, please plan to transfer your shares by December 15 of that year.

Because everyone's tax situation is different, this information should not be construed as tax advice.  If you have any questions, please read IRS Publication 526 and consult your tax professional.