Many of our clients enjoy making charitable donations, whether it’s paying tithing or supporting a local nonprofit. But what many people don’t realize is that how you give can make a big difference, both for the organization you support and for your own financial picture.
Here are two powerful ways to make your giving go further:
1. Donating Appreciated Investments Instead of Cash
If you own investments such as stocks, mutual funds, or ETFs that have grown significantly, you may be able to make a bigger impact by donating those assets directly to charity.
When you donate appreciated securities that you’ve held for more than one year, you avoid capital gains taxes. If you sold the investment first, you’d owe taxes on the gain before giving the remainder. By donating it directly, the charity receives the full value, and you pay no tax on the appreciation. On top of that, you can still deduct the full fair market value of the donation if you itemize deductions.
For example, suppose you purchased $5,000 worth of stock that is now worth $15,000. If you sold it, you might owe taxes on the $10,000 gain. But if you donate the shares directly, you can avoid the capital gains tax and still deduct the full $15,000 charitable contribution.
2. Qualified Charitable Distributions (QCDs) from Your IRA
For those age 73 or older, a QCD allows you to transfer up to $108,000 per year (in 2025) directly from your IRA to a qualified charity. The donation counts toward your Required Minimum Distribution (RMD) and is excluded from your taxable income. This can reduce your overall tax bill and maximize the amount going to charity, especially if you don’t itemize deductions or are already near income thresholds that affect Medicare premiums or tax rates.
Whether you are paying tithing to your church, supporting education, or funding community programs, giving through appreciated investments or your IRA directly can help maximize both your impact and your tax efficiency.
Disclosure: Capstone Capital Wealth Advisors is not a tax advisor. This material is provided for informational purposes only and should not be construed as tax or legal advice. Before implementing any charitable giving strategy, please consult with your tax professional to determine how these options may apply to your individual situation
