Stock & Qualified Charitable Distributions STOCK GIFTS Donating appreciated stock to Friends of the Children - SW Washington can have significant tax advantages! If you sell appreciated stock, you will be subject to capital gains tax which is assessed based on the difference between the purchase price and the sale price. However, if you donate the appreciated stock directly to Friends of the Children - SW Washington, you avoid paying capital gains tax altogether. As an additional benefit, you receive a charitable deduction for the full value of the stock at the time of the donation, reducing your taxable income. Generally speaking, it is the policy of Friends of the Children - SW Washington to sell donated stocks. That said, the investment committee reviews each stock donation, and reserves the right to hold shares if there is significant long-term growth potential. Please call Brittany Gosselin, 360.281.7826, bgosselin@friendsswwa.org, before beginning the donation process in order that we may alert our broker. If our broker is not advised before the transfer is initiated it will be assumed to be fraudulent and, therefore, rejected. QUALIFIED CHARITABLE DISTRIBUTIONS A Qualified Charitable Distribution (QCD) is a type of charitable donation made directly from your pre-tax IRA Individual Retirement Account (IRA) to a qualified charity. Did you know that if you are age 73 or older, you are required to take a distribution from your IRA each year? That distribution is called a Required Minimum Distribution (RMD). If you donate the entirety or a portion of your RMD to Friends-SW Washington the gift is considered a Qualified Charitable Distribution (QCD). When you keep your RMD, you pay income taxes on the distribution value. When you donate the distribution, the full gift value passes free from income tax to the charity. There are additional tax benefits both for people who itemize and people who take the standard deduction. For those who itemize, you receive a tax deduction for the value of the donation (up to $100,000), lowering your adjusted gross income. Lowering your adjusted gross income can affect your tax bracket, reduce the amount of Social Security benefits subject to tax, and potentially lower the cost of Medicare premiums. If you take the standard deduction on your taxes, the donated amount is excluded from your taxable income. Please keep in mind that a QCD must be initiated by your retirement fund directly and mailed directly to Friends of the Children - SW Washington. If the funds pass through you, in any way, the tax benefits outlined above do not apply. How to make an IRA Qualified Charitable Distribution gift: 1. Contact your IRA plan administrator to make a gift from your RMD to us. They will need the following information: a. Organization Legal Name: Friends of the Children-Southwest Washington b. Federal Tax ID #: 85-1261131 c. Mailing address: PO Box 61882, Vancouver, WA 98666 d. Physical Address: 8100 NE 28th Street, Vancouver, WA 98662 2. Contact Brittany Gosselin, Legacy & Major Gifts Officer at bgosselin@friendsswwa.org if you have any questions or if you wish for your gift to be used for a specific purpose. LIFE INSURANCE Gifting a whole life insurance policy that’s outlasted its original purpose, while you’re alive, to Friends of the Children - SW Washington is an excellent way to support this mission. Depending on the specific details of the individual policy, Friends - SW Washington may continue to make the premium payments, or sell the policy to a third-party broker. Either way, you receive a charitable deduction for the surrender value of the policy.