Morningstar.com - Want Big Profits Guaranteed? Give Away Your Stock

Morningstar.com - Want Big Profits Guaranteed? Give Away Your Stock: "Want Big Profits Guaranteed? Give Away Your Stock

Donating stock to charity might be the surest investment you can make.
by Craig Woker, CFA 05-04-05 06:00 AM
Psst! Want a hot stock tip that will yield a guaranteed 52% return? Give your equities away.
If you're still reading, thanks for providing me with a little more time to prove that I'm not delusional. My reasoning has to do with an underused nuance of the U.S. tax code: equity donations. Handing over your stock certificates to your favorite charity not only helps fund the good work they do but can also provide a lucrative way to lower your tax bill. This is a win-win scenario. It works because of the structure of tax law: The IRS allows investors to write off the current market value of any stock held for at least a year, not the price investors originally paid for the shares. (Short-term holdings don't receive this favorable tax treatment.)"