Stock

Frequently Asked Questions

 

Why donate stock?

It is advantageous for donors to pay their contribution with certain stocks because they receive an income tax deduction for the entire fair market value of the stock without having to pay any capital gains tax on the appreciation (difference between their basis in the stock and its fair market value).  In order to qualify for the full deduction, IRS regulations require that the donor must have owned the stock for a period long enough to classify any gain on its disposition as a long-term capital gain rather than ordinary income or short-term capital gain. 

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How is it done?

When making the pledge:

When filling out the pledge card, the donor should be sure to mark the payment type labeled “direct bill” or “stock contribution”.  This sets up the donor’s account to receive payment through a method other than payroll deduction.  A pledge reminder will be sent out before the end of the year, so donors wanting to contribute before year-end will have a chance to do so.

When paying the pledge:

If the stock is held by a broker:

The company that United Way uses to process stock contributions is:

StockCross Financial
17151 Davenport, Ste 117
Omaha, Nebraska 68118
1-800-225-6196 X2244
Attn:  Ed Shaughnessy

If the donor also uses StockCross Financial, he/she can simply contact Ed by calling him at 1-800-225-6196 X2244 with instructions to credit the shares to the United Way of the Midlands account #450-18682. Ed’s e-mail address is ed.shaughnessy@stockcross.com if you should need to e-mail him.

If the donor uses a different broker, he/she should contact the broker instructing him/her to transfer the shares to the United Way of the Midlands’ account at StockCross Financial, to the attention of Ed Shaughnessy.

The following information should be provided in the correspondence:

DTC #: 0445
Acct: #: 450-18682
Donor’s Name (To ensure that United Way will be informed who the gift is from)
StockCross Financial’s alphabetical designation is: STOX

The above information allows the donor’s broker to electronically transfer the stock to the United Way’s account at StockCross Financial.  At that point the stock will be sold immediately and the proceeds distributed to the United Way. Please instruct your broker to share your name with our broker, to help insure proper credit for your pledge. Also, please contact Pam Schwalb with your stock information so she can be looking for your stock proceeds check and will know where to credit the funds. Pam’s contact information is at the bottom of these instructions.

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What documentation do I need for the tax deduction?

Per IRS regulations, the charitable organization is not supposed to provide a valuation for stock contributions.  However, the organization is required to provide a receipt which provides a detailed description of the gift, the date the gift was received, and that no goods or services were provided in exchange for the gift.  These receipts are usually sent out in January each year.

The donor’s broker can provide a market valuation of the stock on the day it was transferred.  These two documents combined provide adequate documentation to support the deduction. 

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Who should I call if I have questions?

Pam Schwalb
Chief Operating Officer
(402) 522-7926
pschwalb@uwmidlands.org

Fax number is 402-522-7987.

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