Pretty soon, you’ll be seeing red everywhere. With Huskers sports season about to kick off, fans will be showing support for their beloved Nebraska teams in a variety of ways, one of which is through financial support. If you’re a Husker fan and you give money to the University of Nebraska Athletic Department, keep reading to learn how to do so in a more tax-efficient way.
Being a Nebraska-based company, it’s no surprise that a large portion of our clients are big Huskers fans. Greg is one such client. He is a UNL grad and a season ticket holder for football, basketball, and volleyball. His annual giving to the athletic department is $25,000. Rather than write a check to the athletic department this year, we encouraged him to use a highly appreciated stock from his investment account to fund his giving. Here’s how this works:
Greg bought 200 shares of Microsoft in 2012 at a price of $30 per share. Currently, the stock is trading at $133 per share. So, Greg’s investment of $6,000 has grown to $26,600 for an unrealized gain of $20,600. If Greg were to sell these shares, he would pay capital gains taxes of roughly $4,100 at a 20% rate.
If instead, Greg donated these shares directly to the University of Nebraska Foundation and earmarked those dollars for his Athletic Department commitment, he would avoid paying capital gains taxes. He would also receive a charitable deduction for the amount he donates to the Foundation. (Learn more about bunching deductions to exceed the standard deduction.) In effect, Greg is stretching his financial support of the Huskers by using highly appreciated securities rather than cash.
Additionally, the Husker Athletic Department offers an incentive to donors: If you make your 2020 giving commitment in 2019, they award you 15 bonus priority points.
Over the years, we’ve helped other clients like Greg support the Huskers in a tax-efficient manner. The process is simple, and the tax savings can be significant. If this is of interest to you, please connect with us. Here’s to all Husker teams having a great 2019-2020 and GO BIG RED!!!