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Will the Bubble Burst?

The stock market has been on a tear this year, reaching 17000 (July 3, 2014) less than eight months after closing above 16000 (November 21, 2013).  Before liquidating all your gains to avoid that sinking feeling in the event the market tanks, consider locking in the appreciation with a charitable gift.  There are several satisfying options that might allow you to sleep better:

  • Make your year-end gifts early using stock or mutual fund shares that you have held more than one year.  You’ll be entitled to a deduction for the full fair market value on the date of the gift and avoid the capital gains tax, and possibly the 3.8% net-investment income tax, that you’d owe if you sold the shares.

  • Use shares to fund a charitable remainder trust and retain income for life from the full value of your gift.  You can choose to receive a fixed income equal to a minimum of 5% of the value of your gift (annuity trust) or a fluctuating income equal to at least 5% of the annual value of the assets in the trust (unitrust).  You’ll also be entitled to an income tax deduction for a large portion of what you contribute.

  • Establish a charitable gift annuity that will provide fixed payments for life for one or two beneficiaries.  The exact amount of the annuity payment depends on the age or ages of the recipient(s).  A portion of the annuity received each year will be favorably taxed capital gains.


Please contact us for more information.

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Contact the KQED Gift Planning department for more information or to notify us if we are included in your estate plan.

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