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How to Save Money in Taxes this Holiday Season


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November 05, 2023

This may be controversial, but I am willing to bet that most people who give money do so in a manner that isn't optimal for their tax situation. It's a missed opportunity to potentially save thousands of dollars in taxes, by utilizing appreciated stock which benefits the organization you want to help and saves you more in taxes. Let's look at how this can play out and how you can take advantage of it yourself.

Often people will give cash and not consider the opportunity of giving stock instead. They may want to give in cash, but don't have the amount they want to give and instead will sell the stock first and then give the proceeds. However, this is the least tax efficient method - creating a taxable event when instead they could just gift the stock to the organization while still getting the deduction and not triggering the taxable event. Let's look at an example below.

Let's say Andy wanted to give $100,000 to his favorite charity and Andy was sitting in the 35% marginal tax bracket. Andy could give the $100,000 in cash and by itemizing receive a $100,000 deduction which in return would save himself $35,000 in taxes. Not a bad benefit for helping his favorite charity.

However, Andy doesn't have the money in cash and instead decides to sell some of the stocks in his investment account to get the $100,000 and then gives it to the organization. By doing so Andy triggers a taxable event and a capital gain of $60,000 which results in him having to pay a total capital gain (Fed, State, and NIIT) tax rate of 29.55% in Georgia or $17,730 in taxes. So, although he got the $35,000 deduction for the donation, that was offset by the taxable event and essentially would only save him $17,270 in taxes.

A better option for Andy would have been to instead donate the $100,000 of stock to charity, therefore not incurring capital gains and saving himself significantly more in taxes. As a result, because Andy donates the stock, he not only saves the $35,000 in taxes, but also the $17,730 in capital gains tax he would have paid in the future when he sold the stock. This results in a potential total tax savings of $52,730 for a true total donation cost of $47,270. Below is a chart breaking down this exact example.

Scenario 1

Donate Cash

Scenario 2

Sell Stock and Donate Cash

Scenario 3

Donate Appreciated Stock

Amount Donated




Tax Savings




Capital Gain Realized




Future Capital Gain Eliminated




True Cost of Donation





Federal Marginal Tax Rate


Federal Longterm Capital Gains Tax Rate


Net Investment Income Tax


State (GA) Capital Gains Tax Rate


Total Capital Gains Rate


Stocks Unrealized Gain


As we enter the holidays and end of year you may be inclined to give to charity or another organization, which I encourage you to do. There is truly no better feeling than helping those in need or supporting causes that are doing great work. However, consider how this may impact you financially and how you may be able to optimize your giving from a tax perspective. Feel free to reach out to your Private CFO to discuss more; they would be more than willing to help you decide the best way to be charitable this Holiday season!

If you would like to receive more information on making smart money moves for your future, be sure to contact us today!


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About the author

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Kurt Brucker

Vice President, Private CFO®

A native of Marietta, Kurt graduated from Kennesaw State University (KSU), Summa Cum Laude, with a BBA in Finance and a Coles Scholars minor (top 10 in the business school). Kurt used his experience in the business school to quickly transition and make an impact at oXYGen Financial. In 4 years Kurt has risen from intern all the way to Vice President & Private CFO®.

Kurt lives in Buckhead with his wife Megan and is very involved with the faith community including Passion City Church. He is a die-hard Atlanta sports fan and loves to play golf and meet new people. Kurt is a very driven and motivated individual with a passion for helping others see their dreams come true.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Background and qualification information is available at FINRA's BrokerCheck website.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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