The study noted that if a client were to sell long-term appreciated stock and donate the net cash to charity, the proceeds become subject to capital gains tax. In the highest income bracket, that is 23.8%, with the potential to increase even more if proposed tax legislation being considered in Congress passes. If the stock is donated directly to a public charity, the client minimizes his or her capital gains tax and becomes eligible for an immediate income tax deduction, Fidelity noted.
Charitable giving also can be bundled, putting several years’ donations together in one year, so that the giver rises above the standard deduction allowance and receives a tax break, the study said.