How to Avoid Capital Gains Tax & Invest in Your Community

Avoid Capital Gains Tax with Donor Advised Funds
Opening a donor advised fund administered by a charitable sponsor helps individuals avoid capital gains tax on the sale of stock or other non-cash assets and allows more for giving potential.

As real estate and stock markets grow, many San Diegans are turning to a unique form of giving that increases their charitable giving capacity while maximizing the impact on the local nonprofit sector strengthening our region.

Gifting stock, real estate and other appreciated securities is a strategic, win-win opportunity that is quickly becoming one of the most effective ways you can give back to your community and help others.

The process is simple.

Instead of paying up to 20 percent in capital gains tax on the sale of stock or other non-cash assets, you could open a donor advised fund administered by a charitable sponsor, such as a community foundation like The San Diego Foundation or commercial bank, which allows for more giving potential and immediate tax savings.

Those savings can then be directed to important programs and initiatives that align with your passions and advance quality of life in the region.

Gifting appreciated assets and opening a donor advised fund at The San Diego Foundation also rebalances and improves portfolio maintenance through these additional benefits:

  • Immediate income tax deduction at the point of transfer
  • Value is not subject to Estate Tax
  • Appreciation value is tax-free
  • Increases your charitable contribution

By avoiding capital gains tax, you’re leveraging your contribution for a bigger financial impact in your community while also securing a better tax break. In other words, your charitable investments and assets go much further to grow a vibrant San Diego region.

Asset Types

You can open a donor advised fund using most forms of appreciated assets, so long as you’ve held on to the assets for at least one year. The most common assets The San Diego Foundation helps manage are:

  • Stocks (Publicly Traded, Private and Restricted)
  • Bonds
  • Fund Shares
  • LLP Shares
  • Individual Retirement Account (IRA)
  • Private Equity Stakes
  • Partnership Interests
  • Pre-IPO shares
  • Real Estate

If your real estate property has grown in value, but the expenses and maintenance no longer make it a worthwhile investment, donating real estate to a donor advised fund offers a reduction in taxable estate value and the same benefits as stock contributions:

  1. No taxes on capital gains
  2. Charitable deduction against other income
  3. Reduction of taxable estate value

Start Your Journey

The San Diego Foundation’s charitable giving experts simplify the process of contributing stock and other appreciated securities to meet your person philanthropic goals.

To donate an appreciated asset or learn more about donor advised funds and tax benefits, contact our Development & Stewardship team.

Contact our Development & Stewardship Team today!

  • Or call us at (619) 235-2300.

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