Gifts of Stock Donations and NAP Credits
Donations of stock can be a benefit to you as well as to The Salvation Army. An outright gift of long-term securities (owned more than one year) to The Salvation Army is free of capital gains tax, no matter how much their value may have risen. Therefore, it is better to donate appreciated long-term stock outright than to sell it yourself and then donate the money to charity, in which case you would be responsible for the capital gains tax. A gift of stock also allows you to remove the appreciated asset from your taxable estate.
When you make a gift of long-term appreciated stock, you can deduct the full fair market value of the gift from your taxable income when itemizing deductions in the year you make the gift as long as it does not exceed 30 percent of your adjusted gross income. In addition, you may “carryover” and deduct any remaining amount during the next five years, as long as it does not exceed 30 percent of your adjusted gross income in the year of deduction.
The purpose of the Neighborhood Assistance Program (NAP) is to encourage businesses, trusts and individuals to make donations to approved 501(c) (3) organizations for the benefit of low-income persons. In return for their contributions, businesses, trusts and individuals may receive tax credits equal to 65 percent of the donation that may be applied against their state income tax liability.
Details about the criteria for becoming an approved NAP organization are spelled out in the guidance and procedures section on the Virginia Department of Social Services Website. Applications are available no later than March 15 of each year. All applications must be received no later than the first business day of May. Approved NAP organizations are awarded allocations of tax credits for a 12-month period (July 1 – June 30) and must re-apply each year.
Resource Development Director