Many people like to give charitable donations at the end of the year because of the generosity Christmas inspires, not to mention the possible tax deduction that comes with it.
While cash gifts are appropriate for weddings, birthdays and graduations, you might do better to hang on to your money and give stocks and mutual funds instead. Here are five reasons why:
1. If your stock is worth more than what you paid for it
Let’s say you purchased $4,000 worth of securities several years ago, but today they are worth $8,000. If you gift those shares, you can deduct the current market value of $8,000.