medium · Certified Financial Planner Estate Planning
The Novak household, in the 35 % tax bracket and subject to the 3.8 % Net Investment Income Tax, wishes to make a $100,000 donation to a public charity. They hold stock worth $100,000 with a basis of $18,000 held for six years.
Which strategy results in the lowest net cost to the donors?
- Donating the stock and electing to use the basis for the deduction.
- Liquidating the stock and using the proceeds to fund a Charitable Lead Trust.
- Selling the stock and donating the $100,000 in cash.
- Donating the appreciated stock directly to the charity.
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