Published in the February 2013 newsletter
Mark Furman is the Financial Secretary for MJCBY. He recently spoke with member Robert Berns about using stock transfers to pay for synagogue dues and contributions.
MF: Robert, I noticed that you recently paid your 2013 membership fee and Kol Nidre Appeal pledge by donating stock to the synagogue. Thanks!
RB: Yes, it’s a great way to make charitable contributions and to pay obligations to the synagogue—plus I get significant tax savings at the same time.
MF: How does this work?
RB: Fortunately, Nancy and I picked a few stocks that performed well in the last few years and they have appreciated. By transferring shares of the stock from my brokerage account to MJCBY—making a charitable contribution through the transfer of the shares—we get the full benefit of the value of the appreciated stock. We get the benefit of my original “basis” (what we paid for the stock) plus the appreciation in the stock’s value, and we get to deduct the entire amount as a charitable contribution to MJCBY. Nancy and I have done this for several years; we have paid our dues and Kol Nidre contributions by transferring shares of appreciated stock. It makes a great deal of sense.
MF: Can you give me a hypothetical example?
RB: Let’s say Nancy and I bought 100 shares of Acme Dreidel Company at $10 per share, which means we invested $1,000. If the company has a good year, by the time we have to pay our MJCBY dues or Kol Nidre contribution, the stock may be worth $12 or $13 per share if I’m lucky. I then contact my broker and have them transfer the shares—$1,300 worth as I’m an optimist that it went up that high—to MJCBY’s broker. Nancy and I now get the benefit of having made a $1,300 contribution to MJCBY that cost us $1,000 out of pocket. I have the ability to declare the entire amount as a charitable deduction and I pay no income tax on the appreciated value because I have not “realized” the gain; I did not sell the stock myself. MJCBY sells the shares when the transfer is completed and there is no taxable event to MJCBY.
MF: Is it easy to do this?
RB: It’s as simple as picking up the phone. I call my broker and let him know what I want to do. He then emails me a form on which to identify the shares to be transferred, the synagogue’s stock account and broker information—which can easily be obtained from the MJCBY office. I email the signed transfer form to the broker and, voilà, the stock is transferred to MJCBY. From my perspective, it is a win-win for us and for MJCBY. There is no better tax-advantaged way to make charitable contributions.
MF: Are there any fees associated with this type of transfer?
RB: Generally no. It costs me nothing to make this transfer. Most large brokerage firms do not charge their clients to make charitable stock transfers. The fee is paid by the charitable institution receiving the gift of stock.
MF: Yes, in MJCBY’s case, our broker generously provides a discount on fees. Getting the dues and Kol Nidre money in the door makes it worth our while as well.
If you are interested in learning more about using appreciated stock to pay your synagogue fees and pledges, please contact our Executive Director, Gerry Gross, at the synagogue office (973) 538-9292.