Charitable giving with appreciated stock can be one of the best ways to support causes you care about. Donating highly appreciated stock combines philanthropy, tax efficiency, and tactical portfolio management in a single move. You can take a charitable deduction based on the current market value (subject to IRS rules) of your stock, typically avoid capital gains tax, and simultaneously trim concentrated or overweight positions in your portfolio.
- When selling appreciated stock, you recognize capital gains on the difference between the amount you paid and the amount you sell it for.
- Alternatively, when donating appreciated stock, you can generally deduct the current market value of the shares from your income, subject to adjusted gross income (AGI) limits. Income limits are often 30% of AGI for gifts to public charities.
- With this strategy, you sidestep the capital gains tax you would have owed if you sold first and gave cash from the sale instead.
- Since charitable organizations do not pay capital gains tax, the full market value of your donation can be used.
Why Earlier in the Year Giving Can Make Sense
Many people bunch charitable planning into year end, but if you are specifically worried about a certain stock or ETF underperforming, there is a strong case for making your contribution earlier. By reducing concentration sooner, you can redeploy equity risk into assets you like better, rather than carrying an overweight position when you expect relative underperformance.
- Confirm whether you are donating short or long-term (held > one year) appreciated stock. The tax consequences are different. When donating long term positions you can deduct the full market value. For short-term holdings, you can only deduct the cost basis. In both cases, no capital gains tax is paid, but if you donate short term holdings, you waste the value of the appreciation from a tax standpoint.
For example: If you bought a stock for $10,000 which is now worth $100,000 eight months later, your deduction would be $10,000. If you waited and sold it when held for a year, your deduction would be $100,000. However, it might still make sense if you really wanted to reduce your position now because of market risk. - Check AGI limits and potential carryforwards with your tax advisor; large gifts can create multi-year deduction carryovers.
- A donor-advised fund can be an efficient hub for giving: you transfer appreciated stock once, take the deduction now, and then make grants to charities over time. AGI limits apply for how much you can deduct in a single year.
Donating directly from your IRA can be especially useful if you don’t need the money to live on. If you make a Qualified Charitable Distribution (QCD), you can transfer money straight from your IRA to a qualified charity. The amount of the gift counts toward your RMD but is not included in your taxable income. In effect, you satisfy the requirement to withdraw funds without increasing your tax bill.
Important Considerations
- In 2026, the QCD limit is $111,000 per person. Married couples, each with their own IRA, can contribute $111,000 each.
- You can make a QCD starting at age 70 ½ even though you are not yet required to take an RMD.
- QCDs are not counted toward the ‘maximum amounts deductible’ for those who itemize charitable giving on their tax returns. This feature means a QCD can potentially allow for a larger charitable gift than otherwise possible if you simply donate cash or other assets.
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U.S. markets started the year on a positive note with the S&P 500 reaching a peak of 6,978 in January, up 1.95% from the 2025 close. Sector rotation was the most notable market activity in the first quarter as investors exited software and Magnificent 7 stocks in favor of old economy sectors such as energy, materials, and industrials. As a result, the Dow Jones Industrial Average delivered much better results, reaching a peak of 50,188 in early February, up over 13% for the year.
2025 began with markets walking a tightrope between optimism and anxiety. Investors were asked to believe in rapid technological progress while navigating geopolitical flashpoints, stubborn inflation, and historically high government debt. Against that backdrop, our investment themes leaned toward quality and earnings growth. As the year unfolded, markets delivered a clear verdict on our ideas, rewarding assets tied to real value, earnings power, and structural change rather than speculation or valuation excess.
The artificial intelligence boom is reaching a critical juncture. After years of explosive growth, the economics of AI are shifting in ways that could upend who actually profits from the technology. While investors have poured billions into building the infrastructure behind AI, history suggests that the biggest winners may once again be the users—not the makers—of this new form of intelligence. Please see our initial blog on AI entitled, AI: The Intelligence Revolution
The coming AI revolution is going to be 100 times bigger than the industrial revolution – 10 times bigger and maybe 10 times faster, says Demis Hassabis, the CEO of DeepMind, the artificial intelligence arm of Google, and Noble Prize winner. We’ve received many questions from our clients about the impact of AI and how best to invest in it. Our first attempt at tackling this important topic follows.
Traditionally, the answer for most investors has been a resounding yes. For decades, many benefited from the positive performance of the standard 60/40 portfolio (60% equities/40% bonds). But times change, and bonds may not provide the security they used to. We review the primary benefits of bonds, discuss which types are the best portfolio diversifiers, and when bonds can be most effective.
There is no ‘one-size fits all’ answer to this question. Every recession or bear market is driven by a unique set of events, and the portfolio strategies that work best depend on the specific causes and the prevailing political and economic circumstances leading to the downturn.
Markets around the world are down today due to Trump’s unexpectedly punitive tariffs. These tariffs are feared to be inflationary and may cause a recession in the U.S. and abroad.
As Lenin famously said,” there are decades where nothing happens and weeks where decades happen.” We find ourselves in the thick of chaos, with daily political announcements and stock market gyrations. We anticipated volatility, but we got more than we bargained for.We work hard at fighting confirmation bias. In this blog, we attempt to understand different points of view and explain the steps we have taken in the current environment.
Deep Thoughts and DeepSeek
In 2024, much of the 25% equity market return came from multiple expansion. Earnings for S&P 500 companies only grew about 10%, but the amount investors were willing to pay for those earnings (P/E multiple) expanded by about 16%. Thus, about two thirds of 2024 equity performance came from multiple expansion.
In memory of famous investor Byron Wien, who was known for his list of 10 surprises each year, we provide our own list of potential economic, financial, and political surprises for 2025.
Is the Recent Runup in Chinese Stocks a Durable Rally or a Flash in the Pan?
In August of 2021, we decided China was un-investable and reduced our exposure to Chinese equities. In our blog “From Beijing to Wall Street” (here), we detailed our rationale.
Halloween Came Early
Ouch. Since August 1, the S&P 500 has fallen over 7%, a dramatic move, but not yet a correction from the July highs. However, the NASDAQ is down over 10% and firmly in correction territory.
What’s Happening Under the Covers
Why the U.S. Economy Has Remained Resilient in Spite of the Fed Raising Interest Rates and Reducing Their Balance Sheet
In memory of famous investor Byron Wien, who was known for his list of 10 surprises each year, we provide our own list of potential economic, financial, and political surprises for 2024.
If you just landed from Mars and we told you that three good sized U.S. banks had failed, the Federal Reserve had raised rates 5% in 13 months, the yield curve had been inverted since last year, the latest Senior Loan Officer’s Survey showed banks less willing to lend while already at recessionary lending levels, and according to Treasury Secretary Janet Yellen, we are within two weeks of the government running out of money to pay its obligations, would you believe the S&P 500 is up about 9% thus far this year?
How Banks Work
What Causes Banks to Fail
How the Government is Responding
How Bank and Brokerage Accounts May Be Protected
Dilemma for the Federal Reserve
We suspect most people think getting inebriated is more fun than sobering up.
We hate to sound like a broken record and ruin the party, but inflation presents a problem which won’t be easily fixed.
The four most dangerous words in investing are “this time is different”.
A Tongue in Cheek Guide to the Latest Investment Concepts
Mine your reward coins as you read our blog!
Who doesn’t love the story of David’s triumph over Goliath? This past week a group of “small” investors made tremendous amounts of money (on paper at least) by buying stocks that were heavily shorted by large, sophisticated hedge funds.
Markets hate uncertainty, and we can’t remember an election with such potential disparate outcomes. As we speak, the presidential race looks closer than ever, and the Senate majority is in question. Meanwhile the pandemic rages, and the President and Congress can’t agree on a stimulus plan. It’s no surprise stock market volatility has risen.
Fires are burning. The presidential election has never been more heated, and our whole election process is repeatedly questioned. The cold war with China continues to brew regardless of the political party in power. A global pandemic has taken hundreds of thousands of lives and jobs, created loneliness for our seniors, and caused those entering hospitals for medical procedures to endure alone.
He woke up today and asked us for an update. We explained there was a global pandemic that had claimed almost 400,000 lives worldwide and more than 100,000 in the United States.
How can we treat our ailing financial markets?
Medical experts say widespread lockdowns and social distancing must happen to contain the coronavirus and avoid overwhelming our hospital system.
the Coronavirus
Bombs and tweets couldn’t sink the S&P 500, but Covid-19 did.
While there is a role for gold in a diversified portfolio, gold is not universally liked or owned by investors and wealth managers.
The rates on overnight repurchase agreements, known as repos, suddenly rose above 9% last week.
We never really know where markets and the economy are headed, but market participants constantly look for clues.
Why does the current market tone feel different from the February and March stock market selloffs?
When do they protect you? When do they hurt you?
Worst Day Ever for the Dow Jones Industrial Average!
Perspective As the current bull market ages (from the bear market end in March 2009) investors are increasingly worried about buying at the peak.
The basic difference between a mutual fund and an exchange traded fund (ETF) is that an ETF trades like a common stock as its price changes throughout the trading day.
Brexit is spurring a flight to quality move into US Treasuries.
The short answer is yes.
