Total charitable impact

 

Taxes and charitable giving

Managing the relationship between taxation and charitable giving can be complex and confusing, but the process is critical to ensuring the deductibility of donations and optimizing your financial portfolio.

Refer to the IRS for the details on charitable tax law, including deductions, appreciated assets, IRA charitable rollovers, and more. Please consult a tax advisor for advice on how to give tax-effectively.

Charitable gift valuation and reporting

Gift valuation guidelines are established in current tax regulations. In general, a contribution's value is based on the type of asset donated and date of contribution, which ordinarily is the date when the assets are delivered to the receiving nonprofit organization.

Under IRS regulations, the donor is responsible for determining the valuation date and corresponding fair market value.

For assistance as you consider the deductibility and valuation of your donations, reference:

The following chart details how valuation and deductibility can shift based on the type of asset you donated.

Contribution type Valuation Deduction % of AGI donor can deduct
Cash or cash equivalents Amount of the check, electronic bank transfer, or wire received by Vanguard Charitable Amount of donation           Up to 50% of AGI
Mutual fund shares Closing price (net asset value) on the date on which the donor loses control of the donated shares, multiplied by the number of shares donated
If owned for more than 1 year: Fair market value on the valuation date Up to 30% of AGI (if valued at fair market value)*
If owned for 1 year or less: Cost basis or current fair market value, whichever is lower Up to 50% of AGI (if valued at the lesser of the cost basis or fair market value)
Stock or bond shares Average of the high and low selling prices on the date of contribution, multiplied by the number of units donated
If owned for more than 1 year: Fair market value on the valuation date Up to 30% of AGI (if valued at fair market value)*
If owned for 1 year or less: Cost basis or current fair market value, whichever is lower Up to 50% of AGI (if valued at the lesser of the cost basis or fair market value)

 

*Donors may elect to deduct the cost basis for donated appreciated securities, entitling them to claim deductions up to the same 50% of AGI limitation that applies to cash-equivalent donations. However, donors who make this election must also base deductions on cost basis for any other charitable contributions of appreciated property during the same tax year or carryforward period. Special tax rules will apply.