Gifts of Appreciated Property

Alumni and friends who contribute property to WPI enjoy a double advantage: a federal income tax deduction for the full fair market value of the contributed property, plus avoidance of capital gain tax if the property has appreciated in value. Thus, the actual out-of-pocket cost of such gifts to the donor often can be substantially less than the value of the gift.

The precise impact, of course, depends on the nature of the property contributed and the current tax bracket of the donor. In planning such a gift to WPI, a donor may wish to consider one or more of the opportunities listed below.

Gifts to WPI of stocks, bonds or mutual fund shares you have held long term (at least 12 months and one day) qualify for a charitable deduction based on the fair market value of the securities on the date of transfer. In most cases you will avoid any potential capital gain tax liability. Such gifts may be deducted for federal income tax purposes up to 30 percent of adjusted gross income, with a five-year carry-over provision available, if needed. It is generally inadvisable to give WPI securities in which your capital gain is short-term (i.e., securities that you have owned for less than 12 months). In such cases, the deduction will be for the cost basis of the securities, not the current market value.

You should not give WPI any property in which you have a capital loss. Rather, if you wish to dispose of such securities, you should sell them, establish a deductible capital loss, and then contribute the proceeds to WPI.

Donors considering a gift of appreciated property should contact their tax advisors regarding any personal tax implications.

 
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