Donating Appreciated Stock: 6 Things to Settle Before You Give

Donating Appreciated Stock: 6 Things to Settle Before You Give

Donating appreciated stock is one of the few places in the tax code where you can give away something worth more than it cost you, and the government lets you skip the tax on the difference. Write a check instead and you give up the best part.

The idea is simple. The details are where people trip: how long you held the shares, how much you can deduct in a year, what changed for 2026, and what to do with shares that are down. Six things to settle first.

The firm that fits this topic is Doug Johnson CPA, a Los Angeles CPA firm that works with high earners who hold equity compensation. It is covered near the end. Doug Johnson CPA is a paid featured member of Sam's List.

1. Check the Holding Period Before Donating Appreciated Stock

The short answer: stock held for more than one year and given to a qualifying public charity generally lets you deduct its full fair market value. Stock held one year or less generally limits the deduction to what you paid for it.

That one-year line matters most for people who received shares recently. Shares that came from a restricted stock unit vest start their holding period when they vest, not when the grant was made, and stock bought on the open market starts its clock on the purchase date. A donor with a large unrealized gain and eleven months of holding time can often do better by waiting a few weeks.

The limitation: waiting exposes you to the price. A stock that falls between now and day 366 can erase the benefit you were waiting for.

2. Donating Appreciated Stock Often Beats Selling First and Giving Cash

If you sell appreciated stock and donate the cash, you owe tax on the gain, and you deduct the cash. If you give the shares directly, you generally owe no tax on the gain, and the charity can sell them tax free.

On $20,000 of stock with a $5,000 basis, the gain is $15,000. Selling first means that gain is reported on your return, taxed at capital gain rates and possibly the 3.8 percent net investment income tax if you are above the income thresholds. Giving the shares means the $15,000 is never reported by you at all.

The limitation: the charity has to be able to accept securities. Many large organizations have a brokerage account set up for it, while smaller ones may not. Ask for their transfer instructions before you start, not after.

3. Know the Charitable Deduction AGI Limit and the 2026 Changes

The deduction for long-term appreciated stock given to public charities is generally limited to 30 percent of your adjusted gross income in a year. Cash gifts to the same organizations are limited to 60 percent. If your gift is larger than the limit, the excess can generally be carried forward for up to five years.

For 2026 and later, the 2025 tax law added new limits. Itemized charitable deductions now carry a floor of 0.5 percent of adjusted gross income for all itemizers, with the disallowed amount generally eligible to carry forward, and the tax value of itemized deductions is capped at 35 percent for taxpayers in the top bracket. Those rules mean a very large gift in a single year can be worth less than it once was, and that spreading it out or planning the timing has become more important.

The limitation: these rules interact with each other and with other limits on itemized deductions. Run the numbers for your own return before a gift, not after.

4. Do Not Donate the Shares That Are Down

The same logic works in reverse for a loser. If you give shares worth less than you paid, your deduction is limited to their lower value, and the loss disappears with them.

Sell those shares instead, recognize the loss, and give the cash. You can use the loss against other gains, and the charity gets the same dollars. A donor sitting on a mix of winners and losers should usually give the winners and sell the losers.

The limitation: selling at a loss means you cannot buy the same stock back within 30 days either side without the wash sale rules limiting the loss, so do not repurchase right away.

5. Direct Gift or Donor Advised Fund? Decide When You Want the Deduction

A donor advised fund stock donation splits the gift into two decisions. You give the shares to the fund's sponsor and take the deduction in the year of the gift. The money is invested, and you recommend grants to charities over time.

That helps in a year with unusually high income, such as the year of a large equity vest or a company sale. You take the deduction when it is worth the most, and spread the actual giving across later years.

A direct gift to a charity is simpler and puts the money to work immediately. The deduction rules are the same for both in the usual case of a public charity or a donor advised fund sponsor.

The limitation: money in a donor advised fund generally cannot be taken back. Once you give, the funds are for charitable purposes only, with the sponsor holding legal control of the account.

6. Get the Paperwork and the Date Right

The gift counts when the transfer is complete, which is not the same as the day you decide. A transfer started on December 29 that settles in January can be treated as a January gift for tax purposes, and the stock's value is measured on the date the gift is complete.

For stock listed on an exchange, value is generally the average of the high and low price on the date of the gift. A written acknowledgment from the charity is required for gifts of $250 or more. Noncash gifts over $500 in total go on Form 8283, and publicly traded securities do not need a qualified appraisal.

Some shares need extra care. Stock in a private company generally needs a qualified appraisal, and restrictions on resale affect value. Shares acquired through stock options or an employee stock purchase plan have holding period rules, and giving them away too early can be treated as a sale that triggers ordinary income.

The limitation: a transfer that fails or lands late is a problem that shows up on December 31. Ask the charity and your broker for the timeline in November.

Doug Johnson CPA: Equity Compensation and High-Income Years

Doug Johnson CPA is a CPA firm in Los Angeles, founded in 2024, with 3 employees. It serves clients nationwide and positions itself as the CPA firm for growing businesses between $250,000 and $10 million in revenue and for high earners with equity compensation, with listed minimums of $250,000 income or $250,000 revenue.

A gift of shares usually follows a large vest, a tender offer or a sale, which is exactly the situation where timing, holding periods and limits collide. A CPA who works with equity compensation sees the vest dates and the tax year together.

Doug Johnson CPA has 15 verified client reviews on Sam's List as of 2026-10-02. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Doug Johnson CPA is a paid Sam's List member. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: a three-person firm founded in 2024 has finite capacity and a short track record, so ask who does the work and who reviews it, especially in the fourth quarter. A CPA does not choose your charity or advise you on investments, and the listed minimums put smaller incomes outside its range.

Frequently Asked Questions

Is donating appreciated stock better than giving cash?

Often, for stock held more than a year. You can deduct its full value and generally avoid the tax on the gain. Giving cash is simpler and better for shares that are down, because you can sell them, claim the loss and give the proceeds. Run both for your own return.

What is the deduction limit for donating appreciated stock?

Generally 30 percent of your adjusted gross income for long-term appreciated stock given to public charities, with the excess carried forward up to five years. For 2026 and later, additional limits apply to itemized deductions, so check your own numbers before a large gift.

Can I donate stock to a donor advised fund?

Yes, most sponsors accept publicly traded stock. You generally take the deduction in the year of the gift and recommend grants to charities later. The gift is irrevocable, so be sure you want the money committed to charitable purposes before you transfer it.

Do I need an appraisal to donate stock?

Not for publicly traded stock, which is valued from market prices. Stock in a private company generally needs a qualified appraisal, with thresholds that depend on value. Noncash gifts over $500 are reported on Form 8283, and the charity's written acknowledgment is required for $250 or more.

If you expect a large vest or a sale this year, ask your CPA to model a stock gift before December, when transfers get slow. You can browse accountants on Sam's List, including the firm above.

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About the author: Kimberly Green is cofounder of Sam’s List, a directory and matching platform for financial professionals.