Rather than making a donation of stock and cash, would Derek be better off first selling...

 

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Rather than making a donation of stock and cash, would Derek be better off first selling the stock, and then making a gift of cash (both of the stock proceeds and the original cash contribution)? Provide a comparison of each alternative and advise which is optimal from a tax perspective. Continue to use a 2019 tax year for the purpose of this analysis. For the 2019 tax year, charitable contributions are placed into a 20%, 30%, or 60% of AGI category, and the overall charitable contribution cannot exceed 60% of AGI. During 2019, Derek made the following contributions to his church: Cash $40,000 General Motors Stock $90,000 c's AGI for The GM stock was acquired 3 years ago at a cost of $10,000. De 2019 is $120,000. Rather than making a donation of stock and cash, would Derek be better off first selling the stock, and then making a gift of cash (both of the stock proceeds and the original cash contribution)? Provide a comparison of each alternative and advise which is optimal from a tax perspective. Continue to use a 2019 tax year for the purpose of this analysis. For the 2019 tax year, charitable contributions are placed into a 20%, 30%, or 60% of AGI category, and the overall charitable contribution cannot exceed 60% of AGI. During 2019, Derek made the following contributions to his church: Cash $40,000 General Motors Stock $90,000 c's AGI for The GM stock was acquired 3 years ago at a cost of $10,000. De 2019 is $120,000.

Answer rating: 100% (QA)

Answer Derek should sell the GM stock and donate the cash proceeds to his church This is beca... View the full answer