Two Simple Tips to Avoid Taxes while Helping Students

Kelsey Magilton (CBA ’17) on the steps of the Sydney Opera House
Kelsey Magilton (CBA ’17) on the steps of the Sydney Opera House

Despite the recent ups and downs in the markets, the last few years have been good to most investors. That means it might be time to talk to your financial advisor about readjusting your portfolio. But such a move could come with a big tax hit.

However, by donating stock or other assets that you have held for more than a year directly to the University of Pittsburgh, you could make an immediate positive impact on current students while possibly avoiding capital gains taxes. You might also be able to claim the full value of the donation on your income tax return.

“Directly transferring the stock to Pitt, rather than selling it and reinvesting or realizing the profit, may allow you to increase the amount you give to Pitt without disrupting your income,” said Danni Piccolo, University of Pittsburgh Assistant Vice Chancellor, Schools and Centers Individual Giving. “I would suggest donating it to the Pitt Fund where it can have the most immediate impact on student aid and ground-breaking research.”

The Pitt Fund ensures the University remains accessible and affordable while supporting a broad range of programs, including pioneering research and study abroad opportunities such as the one that allowed Kelsey Magilton to travel to Sydney, Australia to spend a semester as a marketing intern at the iconic Sydney Opera House.

“It was an experience I will carry with me for the rest of my life,” she said. “The biggest thing I learned was the ability to work with people of different cultures. I worked with individuals from every continent.”

Your investment advisor can calculate the exact savings you could realize and will advise you on your best options.

While you are talking to your advisor or lawyer, please also consider naming the University of Pittsburgh as one of the beneficiaries of your life insurance policy and/or retirement account. Naming Pitt in such a way allows you to help the University that has meant so much to you without negatively impacting your income.

You can generally specify a dollar amount to be given to Pitt or you can set a percentage of your estate or retirement savings.

There could also be tax advantages. In fact, your retirement plan is potentially subject to double taxation if passed on to your heirs.

“Whatever your objectives, we will be happy to discuss what you want to accomplish through your gift and can provide sample language for you and your advisor/attorney,” Danni said.

This is not intended to be legal or tax advice. We encourage you to consult with a professional advisor.

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