Charitable Stock Donation vs Cash 2027 Calculator
Compare the after-tax value of donating appreciated long-term stock vs equivalent cash to a public charity in 2027.
Why Donating Appreciated Stock Wins
When you donate appreciated long-term stock (held >1 year) to a qualified 501(c)(3) public charity, you (1) deduct the FULL fair market value, NOT your basis, AND (2) avoid the capital gain tax you would have owed if you sold the stock first. This double tax benefit makes appreciated stock the most tax-efficient form of giving — yet most donors still use cash. Source: IRC §170(e). Last updated: May 2026.
The Two-Layer Tax Win
Layer 1: deduction value. $30K stock donation × 32% marginal = $9,600 saved (same as $30K cash). Layer 2: avoided gain. $20K gain × (15% LTCG + 3.8% NIIT) = $3,760 saved. Total stock benefit = $13,360 vs cash benefit = $9,600. The stock wins by $3,760 — entirely from avoiding capital gains.
Holding Period Requirement
Stock must be held MORE THAN 1 YEAR to deduct at FMV. Short-term holdings get deduction at LESSER of FMV or basis — eliminating the FMV advantage. If you have appreciated stock held just under a year, wait until day 366 before donating. The IRS counts trade date to trade date, not settlement to settlement.
What If You Love the Stock?
Easy fix: donate appreciated shares, then use cash to buy new shares immediately. You end up holding the same position with a STEPPED-UP BASIS equal to your purchase price — essentially resetting unrealized gain to zero. This 'tax-loss-harvest in reverse' is a major reason high earners use Donor-Advised Funds.
Frequently Asked Questions
How much more tax-efficient is stock vs cash to charity?
Stock saves an extra (gain \u00d7 LTCG rate + NIIT). For a $30K stock with $20K appreciation: $20K \u00d7 (15% + 3.8%) = $3,760 saved beyond the regular deduction. On highly appreciated stock, the advantage can exceed 25% of the donation value.
Do I need to hold the stock for more than a year?
Yes. To deduct at fair market value, you must hold the stock for MORE THAN 1 YEAR (long-term capital gain property). Short-term holdings are deductible only at the LOWER of FMV or basis \u2014 which removes the appreciation advantage.
What stock types qualify?
Publicly traded stocks, mutual fund shares, ETFs, and bonds that have appreciated. Restricted stock from your employer can qualify but with valuation discounts. Private company stock is allowed but requires a qualified appraisal for gifts over $5,000.
What's the AGI limit on appreciated stock to public charity?
30% of AGI per year (vs 60% for cash). If you donate stock worth more than 30% of AGI, the excess carries forward 5 years. For very large gifts, consider making the gift in tranches across multiple tax years to stay within the limit.
Can I donate appreciated stock to a Donor-Advised Fund?
Yes \u2014 DAFs are sponsored by public charities and qualify for the 30% AGI limit at fair market value. This is the most popular use case for DAFs \u2014 donate appreciated stock, take the deduction now, recommend grants to operating charities over years. The DAF sells the stock tax-free.
What if my stock has gone DOWN in value?
Do NOT donate depreciated stock \u2014 instead SELL it (capture the capital loss for tax purposes) and donate the cash proceeds. Donating depreciated stock wastes the loss. The two-step approach: sell stock at loss, donate cash, deduct both the cap loss AND the charitable contribution.