How to Donate Stock to Charity & Save on Taxes

How to Donate Stock to Charity: The Complete Tax Guide for US Donors

Donating appreciated stock to a qualified nonprofit is one of the most powerful tax strategies available to US investors, and one of the least used. When you transfer shares held for more than one year directly to a 501c(3) public charity like Jusoor, you avoid capital gains tax on the appreciation entirely and deduct the full fair market value of the shares. The result: the charity receives more, and you pay less in taxes.

In 2026, this strategy has grown even more important. Under the One Big Beautiful Bill Act (OBBBA), a new 0.5% AGI floor now reduces the deductible value of standard cash donations for all itemizers. Stock donations are subject to the same floor, but the capital gains tax savings they generate are unaffected by OBBBA, making appreciated securities the most resilient giving vehicle in the current tax environment.

This guide covers everything you need: the tax mechanics, IRS valuation rules, the step-by-step transfer process, documentation requirements, and advanced strategies like Donor-Advised Funds and Qualified Charitable Distributions.

If you are looking for a broader overview of how charitable giving affects your taxes, start with our companion guide: Tax Benefits of Charitable Donations to 501c(3)s: What Every US Donor Needs to Know.

Key Insights

• Donating stock held over one year means zero capital gains tax and a full fair market value deduction
• The IRS values donated stock at the average of the day's high and low trading prices, not the closing price
• Gifts over $500 require IRS Form 8283; publicly traded securities over $5,000 do not require an appraisal
• Donor-Advised Funds let you donate a large block of stock in one year and distribute grants over many years
• Jusoor accepts stock donations through a secure, fee-free platform embedded on our donate by stocks page. The entire transfer process is handled automatically, with no paperwork required.

Why Donating Stock Beats Donating Cash

The core advantage of gifting appreciated stock is simple: you avoid a taxable event while still receiving the full deduction. Most donors do not realize this. They sell their shares, pay capital gains tax, then donate the after-tax proceeds, leaving both themselves and the charity with less.

Consider a concrete example. You purchased 200 shares of a company at $25 per share five years ago. Those shares now trade at $80 per share. Your unrealized gain is $11,000.

• If you sell and donate cash: you owe federal long-term capital gains tax of up to 20% on the $11,000 gain, plus a 3.8% Net Investment Income Tax (NIIT) if your income exceeds certain thresholds. That is up to $2,618 in federal taxes before state taxes. You donate the remaining cash, roughly $13,382, and your charitable deduction is limited to that lower figure.
• If you donate the shares directly to Jusoor: you pay zero capital gains tax. Jusoor receives the full $16,000 fair market value. You deduct $16,000 from your taxable income. Everyone wins.

The tax savings compound further if you live in a high-tax state like California or New York, where state capital gains taxes can add another 9-13%.

One clarification that often confuses donors: short-term holdings, meaning stocks held for one year or less, do not receive this treatment. For short-term appreciated stock, the deduction is capped at your original cost basis, not fair market value. And for stock that has lost value since you purchased it, donating it directly is almost never the right move. Instead, sell the depreciated shares to lock in a capital loss on your tax return, then donate the cash proceeds. You get two separate tax benefits that way.

How the IRS Values a Donated Stock

Getting the valuation right matters. The IRS does not use the closing price or the price at the moment of transfer. Under IRS Publication 561, the fair market value of a publicly traded donated security is the average of the highest and lowest selling prices on the exact date the transfer is completed.

The formula is straightforward:

Fair Market Value = (Highest price on transfer date + Lowest price on transfer date) / 2 x Number of shares

Because this calculation uses intraday high and low prices, the final valuation can only be confirmed after markets close on the transfer date. If markets are closed on the transfer date, for example on a weekend or public holiday, the IRS applies a weighted average of the nearest trading days before and after the gift date.

Mutual fund donations follow a different rule. Because mutual fund shares do not trade continuously throughout the day, their fair market value is simply the Net Asset Value (NAV) at the close of business on the transfer date, multiplied by the number of shares donated.

This precision matters especially for large gifts. A stock valued at $50.10 at the close could have a high-low average of $51.30, meaningfully increasing your deduction on a block of 500 or more shares.

What Counts as the Completed Date of a Stock Donation?

The date of completion determines both the valuation date and whether the gift falls within the tax year you intend. For electronic DTC transfers of publicly traded stock, the most common method, the gift is considered complete on the date the shares arrive in the charity's brokerage account and are removed from your control.

This distinction is critical in December. If you instruct your broker on December 28 but the shares do not settle in Jusoor's account until January 2, the gift is a next-year contribution for tax purposes. Always initiate stock transfers well before December 31, leaving at least five to seven business days for settlement.

For physical stock certificates delivered by registered mail, the completed date is the postmark date, similar to how a mailed check is dated. Electronic transfers from IRAs for QCD purposes follow slightly different rules based on when the IRA custodian releases the funds.

Step-by-Step: How to Transfer Stock to Jusoor

Gifting shares to Jusoor takes just a few minutes. Visit our donate by stocks page and use the embedded donation tool, a secure, fee-free widget powered by DonateStock, the most trusted platform in stock gifting. You do not need to contact Jusoor directly or prepare any transfer documents yourself. The platform handles everything.

• Step one: Visit the Jusoor donate by stocks page. Go to jusoor.ngo/get-involved/donate-by-stocks and click the donation button to launch the secure stock gifting tool.
• Step two: Specify your brokerage and account details. Enter your brokerage firm and provide your account information. The platform uses this to facilitate the seamless transfer of your shares directly to Jusoor.
• Step three: Review and sign. Verify the details you have entered, including the stock name, number of shares, and transfer information, then sign to authorize the transfer.
• Step four: Submit your donation. Submit your request. The platform manages the transfer on your behalf, and Jusoor will issue your written tax acknowledgment once the shares are received.

If you are a financial advisor managing a client's gift, you can request DTC transfer instructions directly at donatestock.com/jusoor.

IRS Documentation Requirements for Stock Donations

The IRS applies progressive documentation rules based on the total value of your non-cash contribution. Understanding these thresholds ensures your deduction holds up if questioned.

• Gifts of $250 or more: You must obtain a contemporaneous written acknowledgment (CWA) from Jusoor. The CWA must include our name, the date of receipt, a description of the shares (ticker and quantity), and confirmation that no goods or services were provided in exchange.
• Gifts of $500 or more: You must complete IRS Form 8283 (Noncash Charitable Contributions), Section A, and attach it to your Form 1040.
• Gifts of $5,000 or more: Most non-cash donations above $5,000 require a qualified appraisal. However, publicly traded securities, meaning stocks and bonds listed on a recognized exchange, are exempt from this requirement. You still file Form 8283 Section A, but no appraisal is needed. Non-publicly traded or restricted securities do require an appraisal and Section B of Form 8283.

Keep all documentation for at least three years from the filing deadline of the return on which you claimed the deduction, and up to six years if the IRS may question substantial understatements of income.

Advanced Strategy: Using a Donor-Advised Fund for Stock Philanthropy

If you want to donate a large block of appreciated stock but are not ready to direct all the funds to a single charity immediately, a Donor-Advised Fund (DAF) offers the ideal structure. You contribute shares to the DAF in one transaction, receive a full fair market value deduction in that tax year, and then recommend grants to organizations like Jusoor at any point in the future.

The DAF sells the stock immediately with no capital gains tax. The proceeds grow tax-free within the fund until you recommend a distribution. This structure is especially powerful under the 2026 OBBBA rules, because it allows you to "bunch" multiple years of giving into a single high-income tax year, clearing the 0.5% AGI floor with one large deduction while maintaining flexibility on timing.

One important distinction for 2026: the OBBBA's above-the-line deduction for non-itemizers (up to $1,000 or $2,000) does not apply to DAF contributions. It applies only to direct cash gifts to active public charities. Donors who itemize are unaffected by this restriction.

For donors who already hold appreciated positions in index funds or ETFs within a taxable account, DAFs are the cleanest vehicle. You transfer the fund shares in-kind, avoid capital gains, take the deduction, and then the DAF can diversify and grant on your behalf.

Qualified Charitable Distributions: Stock Giving for Donors Over 70½

Donors aged 70½ or older who hold IRAs have access to one of the most powerful charitable tools in the tax code: the Qualified Charitable Distribution (QCD). A QCD allows you to transfer up to an estimated $115,000 annually in 2026 directly from your IRA to a qualified 501c(3) like Jusoor. That transfer is excluded from your adjusted gross income entirely.

Because the QCD bypasses your AGI, it is completely immune to the OBBBA's 0.5% floor and the high-income deduction ceiling. It also counts toward your Required Minimum Distribution, giving older donors a way to satisfy their RMD obligation without triggering additional taxable income.

A few important rules apply. QCDs must flow directly from the IRA custodian to the charity. You cannot receive the funds personally first. QCDs cannot go to Donor-Advised Funds or private foundations. And crucially, QCDs are available only from IRAs, not from 401(k), 403(b), or similar employer-sponsored plans. If you have 401(k) assets you want to use this way, you would first need to roll them into a traditional IRA, then initiate the QCD from the IRA.

The Impact of Your Stock Gift to Jusoor

Every appreciated share transferred to Jusoor becomes direct investment in the future of displaced Syrian youth. We channel donations into university scholarships, fellowship programs, and professional mentorship, removing financial and structural barriers that war has placed between talented young Syrians and the education they deserve.

• Since 2011, Jusoor has supported over 20,000 Syrian youth through scholarships, fellowships, and mentorship programs
• Our scholarship recipients study at accredited universities across North America, Europe, and the Arab world
• Donor contributions have funded hundreds of full and partial scholarships for students who had no other pathway to higher education

"When I learned that the scholarship to study in Syria had been reinstated, I was overwhelmed with joy and pride. This scholarship is like a glimmer of hope at the end of a dark tunnel, because it will help me build my future. The future isn't a place we go straight to; it's something we build every day. I am incredibly grateful to Jusoor and IIE for giving me this opportunity again. Sometimes, opportunities come from nowhere. Every difficult experience teaches you something new and brings you closer to achieving your goal, so don't lose hope and don't stop striving; the distance between you and your dream might just be a single step." – Naouar Abdul Wahab

Your stock gift, transferred in minutes with no capital gains tax, funds exactly that kind of outcome.

Jusoor is a registered 501c(3) public charity. Your contribution is tax-deductible to the full extent permitted by law. To begin your stock transfer, visit our donate by stocks page. It takes just a few minutes and no paperwork on your end.

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Frequently Asked Questions

How do I donate stock to charity?

To donate stock to Jusoor, visit our donate by stocks page and use the embedded stock gifting tool. You register, specify your brokerage and account details, verify and sign the transfer, then submit. The platform handles the transfer automatically. There are no fees and no paperwork you need to prepare yourself. Jusoor will issue your written tax acknowledgment once the shares are received.

What are the tax benefits of gifting appreciated stock instead of cash?

Donating appreciated stock held for more than one year to a 501c(3) eliminates the capital gains tax you would owe if you sold the shares first, which can be as high as 23.8% federally, and allows you to deduct the full fair market value of the shares on your tax return. This dual benefit means both you and the charity come out ahead compared to a cash donation of the same amount.

How does the IRS value a stock donation?

Jusoor and the IRS calculate the fair market value of a donated publicly traded stock by averaging the highest and lowest selling prices of that stock on the date the transfer is completed. This is not the closing price. For mutual fund shares, the fair market value is the Net Asset Value (NAV) at the close of business on the transfer date.

Do I need an appraisal to donate stock worth more than $5,000?

No. Publicly traded securities are exempt from the qualified appraisal requirement, even when their total value exceeds $5,000. You do need to complete Section A of IRS Form 8283 and attach it to your tax return. Restricted, non-publicly traded, or closely held shares require a qualified appraisal and Section B of Form 8283.

What is IRS Form 8283 and when do I need it?

IRS Form 8283 is the Noncash Charitable Contributions form, required whenever a single donation of non-cash property, including stock, exceeds $500 in total value. You attach it to Form 1040 when you file your taxes. For publicly traded securities under $500 in value, a contemporaneous written acknowledgment from the charity is still required but Form 8283 is not.

Can I gift stock that has lost value to charity?

Donating depreciated stock, meaning shares currently worth less than you paid, is generally not tax-efficient. Jusoor and other charities can only receive the current market value, and you cannot claim a capital loss on a donated asset. The better strategy is to sell the shares yourself, claim the capital loss on your tax return to offset other gains, and then donate the cash proceeds to Jusoor. This way you capture two separate tax benefits.

What is the 30% AGI limit on stock donations?

Under IRC Section 170, donations of long-term appreciated property, including stock, to a public 501c(3) are deductible up to 30% of your Adjusted Gross Income in any given year. Amounts above that limit carry forward for up to five tax years. Cash donations to the same organizations are deductible up to 60% of AGI, which is why combining stock and cash gifts in the same year requires careful planning to maximize both limits.

Can a nonprofit accept stock donations directly?

Yes. Jusoor accepts stock donations through the embedded tool on our donate by stocks page, powered by DonateStock. The platform handles the full transfer process automatically, including all DTC coordination. There are no fees and no paperwork for the donor to prepare.

How does donating stock affect my state taxes?

The state tax treatment of stock donations varies by state, but most states that have an income tax allow a charitable deduction that mirrors the federal deduction. In high-tax states like California, New York, and New Jersey, the capital gains tax savings from donating appreciated stock rather than selling it can be substantial, sometimes adding another 9-13% in state tax avoided. Consult a qualified tax advisor for state-specific guidance.

Are there ways to donate stock if I use a financial advisor?

Yes. Financial advisors can initiate a stock transfer on behalf of their clients using the DTC transfer instructions available directly at donatestock.com/jusoor. There is a dedicated advisor request option on that page. Many advisors proactively review client portfolios for appreciated positions that would benefit from charitable transfer, and the DonateStock platform makes the execution straightforward without requiring any direct coordination with Jusoor.

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The information in this article is provided for general educational purposes only and does not constitute financial, tax, or legal advice. Tax laws are complex and change frequently. The figures, limits, and rules referenced here reflect our best understanding as of the publication date, but they may not reflect the most current regulations. We strongly encourage you to consult a qualified tax advisor, financial planner, or attorney before making any charitable giving decisions. Jusoor does not assume responsibility for any action taken based on the information presented here.