No matter how frequently you remind clients to pause before they automatically reach for their checkbook to make a charitable donation, many clients still give cash! As an attorney, accountant, or financial advisor, you know that giving long-term appreciated assets is often one of the most tax-savvy ways your clients can support their favorite charities. Nevertheless, it’s sometimes hard to convey that message to clients with words that stick. Next time, consider using examples to help clients see the benefits.

Below are three simple examples* to help you show your clients the benefits of giving appreciated stock.

Sally and Mark Jones give $100,000

Sally and Mark Jones plan to give $100,000 to their OCF Donor Advised Fund to organize all their giving for the calendar year. The Joneses have a combined adjusted gross income of $600,000, which lands them in the 35% federal income tax bracket. If they gave $100,000 in cash to their DAF, they could realize an income tax savings, potentially, of $35,000.

APPRECIATED ASSETS: Sally and Mark give highly-appreciated, publicly-traded stock, currently valued at $100,000 to their Donor Advised Fund. They’ve been holding the stock for several years, and the shares have a cost basis of $20,000. Not only are they eligible for a potential income tax deduction that will save them up to $35,000, they can also potentially avoid $12,000 of capital gains tax that they would have owed if they’d sold the stock (using a long-term capital gains tax rate of 15%).

Jenny and Joe Smith give $1 million

CASH: Jenny and Joe Smith plan to give $1 million to community causes this year. They give $500,000 in cash to their Donor Advised Fund at the Omaha Community Foundation, which they will use to support their favorite nonprofits and community initiatives. They also make a $500,000 gift of cash to an unrestricted fund at the Omaha Community Foundation to help address the region’s greatest needs for generations to come. Since Jenny and Joe are in the highest federal income tax bracket, if they give $1 million in cash, they could potentially save up to $370,000 in income taxes.

APPRECIATED ASSETS: The Smiths give publicly-traded stock instead of cash, assuming a $200,000 cost basis in stock currently valued at $1 million, they still potentially save up to $370,000 in income tax, and they also potentially avoid $160,000 in capital gains tax (based on a long-term capital gains tax rate of 20%).

Casey and Brett Thomas give $5 million

Casey and Brett Thomas plan to donate $5 million as the cornerstone of their overall charitable giving plan. They intend to use publicly-traded stock they’ve held for several years, currently valued at $5 million. They want to receive a lifetime income stream from these assets, with the remaining assets flowing to their fund at the Omaha Community Foundation after their deaths.

In this case, you should explore establishing a charitable remainder trust that provides an income stream to the couple while both are living and to the surviving spouse for reminder of their lifetime.

Casey and Brett are both 55 years old. The stock has a very low cost basis – just $500,000 –because the Thomases have held it for so long. Depending on the IRS’s applicable rates, and assuming a 5% annual payout rate paid at the end of each quarter, here are the approximate tax results the Omaha Community Foundation can help you achieve for your clients by helping your establish the charitable remainder trust:

  • $1,042,550 potential income tax deduction based on the present value of the gift of the remainder interest to charity
  • $4,500,000 in capital gains that may not be subject to tax
  • $250,000 in total payments to the couple during the trust’s first year
  • Annual payments of 5% of the value of the assets in the trust. The income stream will fluctuate depending on the value of the assets.

After both spouses die, the remaining assets will flow to the Thomas Family Fund, a Donor Advised Fund at the Omaha Community Foundation, which Casey and Brett established when they set up the trust.


Of course, no client’s circumstances will match these examples exactly. The Omaha Community Foundation is happy to discuss your clients’ individual situations and can create charitable giving plans to meet their financial and charitable goals. Please reach out to us early in the planning process. We’re here to be a resource for you and your clients.

*These examples are for illustration purposes only. Every client’s situation is different, and therefore the tax strategy and tax impact will be different for each client. For example, these illustrations are based on federal income tax rates only, and you’ll need to evaluate, among many other factors, the impact of state taxes.