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Let's say you were going to donate stock to charity from either of these sources (ESPP, RSU) Is there any way to avoid taxation when it becomes yours to donate
by zdw 3y ago
Let's say you were going to donate stock to charity from either of these sources (ESPP, RSU)
Is there any way to avoid taxation when it becomes yours to donate, or to be refunded the money used to pay taxes that you no longer owe as you don't own the stock?
- loeg 3y agoNo.
- joshuamorton 3y agoYes, you'd set up a Donor Advised Fund, transfer the stock to that fund, and sell it from within the fund, or donate the stock directly to an large established nonprofit that is capable of accepting donations of stock.
- skellington 3y agoI don't think that's what the person is asking. He's asking if you can avoid ALL taxes on RSUs by donating all of it. And the answer is NO. You can't transfer an RSU grant and when it vests, the taxes are automatically paid for by the company (RSU manager) selling 33% (varies) of the shares. Once you have the shares you can do the above and can avoid taxes on the gains of post-tax shares.
- joshuamorton 3y agoMaybe, but > donate, or to be refunded the money used to pay taxes that you no longer owe as you don't own the stock? Would still be yes, as you can deduct the value of the stock, assuming you're over the standard deduction.
- skellington 3y agoTrue. It's a discount on the tax, but you don't get it all back. So, RSU = 100K (33K taxes), you get 67K after initial taxes. You donate 67K, you get 22K in tax credit. Government gets 11K in taxes even though you didn't see one penny from the RSUs.
- astrange 3y agoDonating appreciated stock is better than donating cash, but 1. only if you itemize 2. it can never save you money. You have to want to donate either way; it's just a slightly more efficient way to do that.