Donating small amounts of money- RSU/EPSP tax implications?

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novice111
Posts: 90
Joined: Mon Jun 03, 2019 12:45 am

Donating small amounts of money- RSU/EPSP tax implications?

Post by novice111 » Sat May 23, 2020 1:30 am

i don't have much money saved up yet but i really want to be able to donate something to a non-profit that i've spent a lot of time vetting.
hopefully i will have more in the future to give more,but this is my question for now.

my donation will be a couple of thousand dollars only, and way below the standard deduction.
we also have a 150 k on a 3.125% mortgage left
filing MFJ

questions:

1.i have a single member s-corp. from what i'm reading , there's no tax benefit to donating via an S-corp. i may as well donate as an individual.
Did i get that right?

2. It makes sense to donated appreciated stocks-i checked with the non-profit - they can accept stocks
(will they also accept mutual funds?
not sure, they're checking)

portfolio contains TSM and total international index in taxable. the only individual stock is spouses' company stock purchased via epsp, and some vested RSUs

VTI and VXUS-some lots with short-term gains.

Can i donate lots with short-term gains?

3. Company stock has lots with gains
what are the caveats to donating RSUs that vested this year?
what are the caveats to donating stocks purchased via EPSP this year?


Thanks.
Last edited by novice111 on Sat May 23, 2020 2:05 pm, edited 3 times in total.

NJ_Bogler
Posts: 50
Joined: Mon Oct 01, 2018 3:43 pm

Re: Charitable giving- how to optimize

Post by NJ_Bogler » Sat May 23, 2020 5:54 am

get a donor advised fund. fidelity or Schwab are two of the more popular options. makes it easy to donate shares or funds with long term gains. A search here will bring up a ton of posts about them that you will likely find helpful.

Topic Author
novice111
Posts: 90
Joined: Mon Jun 03, 2019 12:45 am

Re: Charitable giving- how to optimize

Post by novice111 » Sat May 23, 2020 1:53 pm

NJ_Bogler wrote:
Sat May 23, 2020 5:54 am
get a donor advised fund. fidelity or Schwab are two of the more popular options. makes it easy to donate shares or funds with long term gains. A search here will bring up a ton of posts about them that you will likely find helpful.
Thanks. i'm aware of DAF.

1. they charge 0.6% minumium AUM fee (i know there'sways to transfer assets and immediately donate that avoid this, but my amount donated isn't large enough to make it worthwhile IMO)
2. my questions relate to donating stocks/mutual funds with short term gains, and tax implications of donating RSU/EPSP

NJ_Bogler
Posts: 50
Joined: Mon Oct 01, 2018 3:43 pm

Re: Donating small amounts of money- RSU/EPSP tax implications?

Post by NJ_Bogler » Sat May 23, 2020 6:23 pm

Donating stocks with short term gains makes little sense as you can only deduct the cost basis. You deduct market value for those that have long terms gains.

The ESPP and vested RSUs are treated same way (so you need to determine if they have short term or long term gains).

The reason to open a DAF is that it will provide you this info, and also can handle the mutual fund donations without you needing to worry about whether the charity can handle it.

Topic Author
novice111
Posts: 90
Joined: Mon Jun 03, 2019 12:45 am

Re: Donating small amounts of money- RSU/EPSP tax implications?

Post by novice111 » Sun May 24, 2020 1:27 pm

NJ_Bogler wrote:
Sat May 23, 2020 6:23 pm
Donating stocks with short term gains makes little sense as you can only deduct the cost basis. You deduct market value for those that have long terms gains.

The ESPP and vested RSUs are treated same way (so you need to determine if they have short term or long term gains).

The reason to open a DAF is that it will provide you this info, and also can handle the mutual fund donations without you needing to worry about whether the charity can handle it.
Thanks.Just confirming that my understanding about stocks with short-term gains was correct.

am i correct in understanding that unless i donate more than the standard deduction, i won't have any tax benefit outside of not having to pay the LTGC

NJ_Bogler
Posts: 50
Joined: Mon Oct 01, 2018 3:43 pm

Re: Donating small amounts of money- RSU/EPSP tax implications?

Post by NJ_Bogler » Sun May 24, 2020 6:43 pm

Assuming all your deductions (including charitable) don’t exceed the standard amount, then yes. But what some people do is donate their securities with LTCG then immediately rebuy the same security with cash. That way you have donated to charity (and can potentially deduct it) while also resetting the cost basis.

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