Quick guide · 3 min read
Donating appreciated stock
Giving stock you have held more than a year lets you deduct its full value without paying tax on the gain. It works especially well for shares that have grown a lot.
- Who it fits
- Anyone with long-term gains who gives to charity.
- Figures
- 2026 tax year
The key rule
Held more than a year: deduct market value. Held a year or less: deduct only what you paid.
4 steps
Choose the shares
Pick lots with the largest gains held more than a year.
Transfer, do not sell
Ask the charity or your donor-advised fund for transfer instructions and move the shares directly.
Buy back if you want
You can use the cash you would have given to buy the same shares again, with a fresh, higher basis. Wash sale rules do not apply to gains.
Get a receipt
A written acknowledgment is required for gifts of $250 or more.
Example
Shares vs cash
You want to give $20,000. You hold shares worth $20,000 that you bought for $5,000 years ago. Giving cash: $20,000 deduction, and selling the shares later costs about $3,600 in tax on the $15,000 gain. Giving the shares: the same $20,000 deduction and no tax on the gain. Use the $20,000 cash to buy back shares with a $20,000 basis.
Common mistakes
- Recently vested RSU shares have little gain, so giving them adds little benefit over cash.
- Selling the shares first and giving the cash, which triggers the gain.
- Giving shares at a loss. Sell them, take the loss and give cash instead.
Key dates
- Mid-December
- Start transfers early; they can take several days to arrive.
Questions we hear
How is the value measured?
The average of the high and low price on the day the shares arrive at the charity.
Can small charities accept stock?
Many can't. Giving through a donor-advised fund lets you give stock and then grant cash to any charity.
General education for TaxSquad clients, not advice for your situation. Rules and figures change. Talk to us before acting on this guide.