Gifting Appreciated Assets: Step-by-Step Guide to Donating Stocks and Real Estate

This article explains when and how to donate appreciated stocks and real estate so you and the charity both gain the most. It covers eligibility, the transfer mechanics for securities and property, tax limits and reporting (Form 8283), common pitfalls, and practical checklists drawn from professional experience.

Why donate appreciated assets?

Donating appreciated property you’ve held more than one year generally gives two tax advantages: (1) you avoid paying capital gains tax you would owe if you sold the asset, and (2) you may claim a charitable income tax deduction for the asset’s fair market value (FMV), subject to limits based on the type of recipient. For publicly traded securities given to a qualified public charity, the FMV deduction is often available up to 30% of your adjusted gross income (AGI), with a five-year carryforward for excess amounts (IRS Pub. 526).

In my 15 years advising clients, these gifts are often the single most tax-efficient way to convert unrealized gains into charitable impact—especially when the donor wants to avoid the tax drag of a sale.

Sources: IRS Publication 526 and Publication 561; see IRS overview of charitable contributions: https://www.irs.gov/charities-non-profits/charitable-contributions

Step-by-step: Donating publicly traded stocks or mutual funds

1. Confirm the charity is a qualified organization. Only contributions to IRS-qualified 501(c)(3) organizations (or other qualifying entities described in Pub. 526) generate charitable income tax deductions.
2. Check the security’s holding period. To claim FMV, you must have held the security for more than one year (long-term). If you’ve owned it one year or less, the deduction is generally limited to your cost basis.
3. Contact the charity’s development office or brokerage contact. Ask whether the charity can accept electronic transfers and request its brokerage account details (DTC number, account name and number, transfer instructions).
4. Instruct your broker to transfer shares “in kind” (not sell first). An in-kind transfer sends actual shares to the charity’s brokerage account; it preserves the favorable tax treatment.
5. Get written acknowledgment. For any donation you plan to deduct, get a contemporaneous written receipt from the charity showing date of transfer, number of shares, and a statement that no goods or services were provided in return (IRS Pub. 526). This is required for tax filing.
6. Report the gift on your tax return. For publicly traded securities, include details on Schedule A (if itemizing) and Form 8283 (if required). Publicly traded securities usually do not require a qualified appraisal, but you must keep broker records and the donation acknowledgment.

Typical timeline: electronic transfers usually complete within a few business days; allow extra time at year-end.

Internal resources: For donation documentation and timing, see our guide on Charitable Giving: Receipts, Limits, and Recordkeeping and for stock-specific strategies review Stock Gifts and Appreciated Securities: Tax-Smart Philanthropy.

Step-by-step: Donating real estate (residential, rental, or vacant land)

Donating real estate is more complex because charities must accept the property and you must address title, encumbrances, and valuation.

1. Talk to the charity early. Not all charities accept real estate; many accept only cash or publicly traded securities. If a charity will accept a property, they will often require an evaluation of marketability and a title review.
2. Confirm ownership and clear title. Resolve mortgages, liens, or unresolved disputes before transfer. Some charities will accept property only if the donor clears title or agrees to a bargain sale rather than a gift.
3. Obtain a qualified appraisal (usually required). For noncash gifts valued over $5,000 (other than publicly traded securities), the IRS generally requires a qualified appraisal and completion of Form 8283, Section B (see IRS Publication 561 and Form 8283 instructions).
4. Complete environmental and inspection reviews. Charities worry about environmental liabilities (for example, with former industrial sites). Expect charities to require Phase I environmental reports for commercial parcels.
5. Transfer title correctly. Use the deed form your attorney recommends (warranty deed or quitclaim depending on the situation) and record transfer with county records. Charities often require standard deed language for acceptance.
6. Get written acknowledgment and prepare Form 8283. If the property’s claimed deduction exceeds $5,000, you must obtain a qualified appraisal and attach Form 8283 (Section B) signed by the charity and the appraiser. If the charity sells the property within three years, it may have to file Form 8282 (see IRS guidance).

Internal resources: For detailed real estate donation steps see our posts on Gifting Real Estate to Charity: Steps, Taxes, and Timing and Using Appreciated Real Estate for Charitable Donations.

Key tax rules and limits (current through 2025)

• Long-term vs. short-term: To claim FMV, the donor must have held the asset more than 1 year (long-term). Short-term holdings generally limit the deduction to cost basis.
• Deduction limits by recipient and asset type: For gifts of long-term appreciated capital gain property to public charities (including donor-advised funds treated as public charities), the deduction limit is generally 30% of AGI when deducting FMV. For gifts to private foundations, the limit is typically 20% of AGI. Excess amounts can often be carried forward up to five years (IRS Pub. 526).
• Documentation and appraisals: Noncash gifts over $500 require Form 8283. Gifts over $5,000 (other than publicly traded securities) generally require a qualified appraisal and completion of Section B of Form 8283 (IRS Publication 561; Form 8283 instructions).
• Charity sale reporting: If a charity disposes of donated property within three years, they may need to file Form 8282 and provide records to the donor.

Authoritative sources: IRS Publication 526 (Charitable Contributions), Publication 561 (Determining the Value of Donated Property), and Form 8283 guidance: https://www.irs.gov/forms-pubs/about-form-8283

Short numerical examples (how the math works)

Example — Stock gift

• Bought shares for $10,000; current value $40,000 (held >1 year).
• By donating shares directly: you can usually deduct $40,000 (subject to AGI limits) and avoid capital gains tax on the $30,000 appreciation.
• If you sold instead and donated cash: you’d pay capital gains tax on $30,000 (say 15% long-term = $4,500), leaving $35,500 to donate—worse for the charity and your tax outcome.

Example — Rental property gift

• Purchase price $150,000; current market value $300,000 (held >1 year).
• If you donate the property (charity accepts and FMV deduction allowed): you may deduct $300,000 (subject to AGI limit) and avoid tax on $150,000 of built-in gain. But expect to pay closing costs and complete appraisal and perhaps environmental reviews.

Common mistakes and traps to avoid

• Donating without confirming the charity can accept the asset. Many small charities cannot accept real estate or complex securities.
• Failing to obtain a qualified appraisal where required (noncompliance can disallow the deduction).
• Missing paperwork and acknowledgments—no contemporaneous written acknowledgment, no deduction.
• Incorrectly assuming all charities are equal: limits and record rules differ for public charities vs. private foundations and donor-advised funds.
• Transferring securities incorrectly (selling then donating cash often wastes tax advantage).

Practical tips from my practice

• Coordinate with the charity and your broker or title attorney at least 30–90 days before year-end.
• For highly appreciated low-basis holdings, consider donating shares rather than selling to maximize the gift and minimize taxes.
• If the charity won’t accept real estate, consider donating the proceeds from a sale to the charity and offsetting capital gains with other tax strategies; or consider a charitable remainder trust (CRT) to monetize the asset while getting income and a partial charitable deduction—see our guide on Charitable Remainder Trusts Explained.

Recordkeeping checklist (what to collect)

• Charity acknowledgment (contemporaneous written receipt).
• Broker transfer confirmations (trade confirmations showing gift completed).
• Form 8283 (if required) and the qualified appraisal for gifts > $5,000.
• Copy of the deed, title report, and any environmental or inspection reports for real estate.
• Valuation support (comps for real estate; closing broker statements for stocks).

Frequently asked questions (concise answers)

• Who qualifies as a charitable recipient? Only IRS-qualified organizations listed in Pub. 78 or recognized by the IRS; verify with the charity or the IRS database.
• Can I donate property in a will? Yes—gifts at death are handled differently (estate tax considerations) and may produce a stepped-up basis to heirs; consult an estate attorney.
• What if I want income from the asset but also give to charity? Consider a charitable remainder trust (CRT) or charitable gift annuity for a blended outcome.

Forms and IRS references

• IRS Publication 526, Charitable Contributions: https://www.irs.gov/publications/p526
• IRS Publication 561, Determining the Value of Donated Property: https://www.irs.gov/publications/p561
• Form 8283, Noncash Charitable Contributions: https://www.irs.gov/forms-pubs/about-form-8283
• IRS general page on charitable contributions: https://www.irs.gov/charities-non-profits/charitable-contributions

Professional disclaimer
This article is educational and does not constitute tax, legal, or financial advice. Rules change and individual circumstances vary—consult a qualified CPA, tax attorney, or financial advisor before making large charitable gifts.

If you’d like practical templates or a year-end checklist tailored to your situation, consider scheduling a consultation with your tax advisor—coordination between your broker, attorney, and the receiving charity prevents most problems and delays.

Additional reading on FinHelp

• Charitable Giving: Receipts, Limits, and Recordkeeping — https://finhelp.io/glossary/charitable-giving-receipts-limits-and-recordkeeping/
• Gifting Real Estate to Charity: Steps, Taxes, and Timing — https://finhelp.io/glossary/gifting-real-estate-to-charity-steps-taxes-and-timing/
• Stock Gifts and Appreciated Securities: Tax-Smart Philanthropy — https://finhelp.io/glossary/stock-gifts-and-appreciated-securities-tax-smart-philanthropy/

End of guide.