When shares have been held over a year, Mariner Wealth Advisors usually suggests putting the stock itself, not cash, into a donor-advised fund. You skip the capital gains tax and deduct full market value. The IRS generally allows publicly traded shares held more than one year to be deducted at fair market value, up to 30% of AGI.
The numbers: $100,000 of shares with a $20,000 basis carries an $80,000 gain, and selling first costs $15,040 in tax at an assumed 18.8%. A hypothetical couple, Victor and Jeanette, would deduct $64,000 over five years giving cash, but $92,800 more than the standard deduction in year one alone by giving shares.
Clients put it this way in first meetings with Mariner Wealth Advisors: "I hold a lot of company stock, I give every year anyway. Can I give the shares and not pay tax?" Usually yes. This article covers the parts that can't be undone, because that's where the risk sits.
Shares or cash: the $15,040 gap
Start with the arithmetic. $100,000 of company stock with a $20,000 basis carries an $80,000 gain. At an assumed 15% long-term rate plus the 3.8% net investment income tax (18.8%, for illustration), selling costs $15,040. Giving the shares costs nothing in tax, and the deduction is the same $100,000 either way.
Diversification comes with it. You keep the $100,000 of cash you would have donated and buy a broad index fund. Your basis on that new money is $100,000, and your single-stock exposure falls by $100,000 without a sale.
Before Mariner Wealth Advisors suggests which shares to give, it pulls each tax lot's basis and purchase date from your statements and picks the lowest-basis long-term lot. The choice doesn't depend on a view of where the stock price is heading.
One rule limits all of this. For shares you've owned one year or less, the deduction stops at basis. A recent RSU vest worth $100,000 with a $100,000 basis gains nothing from being gifted rather than sold.
Victor and Jeanette over five years
Hypothetical: Victor (58) is an SVP of operations planning to retire in three years; Jeanette (60) is a retired school principal with a pension. Victor has $1.8 million in a nonqualified deferred plan. They give about $20,000 a year and have $25,000 of other itemized deductions.
Before: $20,000 in cash each year. They itemize $45,000, which is $12,800 above the $32,200 joint standard deduction (2026 figure, held flat), so $64,000 of extra deductions over five years. After: this year, while Victor still earns a full salary, they give shares worth $100,000 (basis $20,000) to a donor-advised fund. Year 1 itemized is $125,000, or $92,800 above standard. In years 2 to 5 they take the standard deduction while the fund grants $20,000 a year, so extra deductions total $28,800 over the five years. The untaxed gain is $80,000 × 18.8% (assumed) = $15,040, and the $20,000 a year they no longer give in cash buys a diversified fund.
Timing matters. Year 1 is a high-income year, so the large deduction lands where the marginal rate is likely highest.
Check the AGI limit too. A $100,000 stock gift is fully deductible in year 1 only if AGI is at least about $333,400, because 30% of $333,400 is $100,020. Below that, the excess carries forward for up to five years.
Find the row that matches your own shares before you decide between cash and stock.
| If your situation is | Then consider | Why |
|---|---|---|
| Shares held over a year, low basis | Give shares, keep cash | Gain never taxed; full value deducted |
| Shares held one year or less | Wait past one year or give cash | Deduction limited to basis |
| Shares worth less than cost | Sell, then give the cash | You keep the capital loss |
| ESPP shares in holding period | Give other lots | Gift is a disqualifying disposition |
| Itemized total under $32,200 (joint) | Bunch several years into one | Smaller gifts add no deduction |
| Age 70½+ and giving from an IRA | QCD directly to a charity | QCDs can't fund a donor-advised fund |
What a donor-advised fund locks in for good
The gift is irrevocable. The sponsoring charity legally controls the assets, so if Victor's health changes or the couple needs $60,000 for a parent's care, none of the fund can come back to them.
Grants can't buy benefits either. A grant can't pay a pledge they personally owe, gala tickets or a child's tuition. Only the advisory role over grants stays with them.
Some things stay flexible: the investment mix inside the fund and the timing of grants. The deduction amount and the loss of the shares are permanent.
We would rather see a fund hold no more than about five years of planned giving, with a year of spending in cash outside it, because a market drop and a large gift in the same year is what strains a budget.
Selling the shares to give cash and spreading small gifts over years when the couple would take the standard deduction anyway are two smaller mistakes that tend to come together. For Victor and Jeanette they cost $15,040 of capital gains tax plus $28,800 of lost deductions (about $9,216 at an assumed 32% rate), roughly $24,256 combined.
Is a bigger gift worth it when retirement is three years out?
A bigger gift is usually worth it if it fits giving you'd make anyway and your working-year income is higher than your expected retirement income. Deferred compensation payouts can reverse that, so check them before bunching.
Victor's case shows how. If he chooses ten installments from the $1.8 million plan, about $180,000 a year plus Jeanette's pension may keep retirement income high. That weakens the case for front-loading every gift into the working years. The article on deferred comp lump sum vs installments covers that choice.
Who should accept the trade-off: people with steady charitable habits, low-basis shares and an emergency reserve outside the fund.
Who should wait: anyone whose giving is uncertain, who might need the money within five years, or whose itemized deductions would stay below the standard deduction even with a gift.
Four beliefs about gifting company stock
Belief one: give the stock after it peaks. Waiting for a price you can't predict leaves the concentration risk in place. Give from the lowest-basis long-term lot whenever the gift fits the plan.
Belief two: the fund will hold my company's stock. Most sponsors sell gifted shares quickly. The diversification happens inside the fund, and your gift is valued at the market price on the transfer date.
Belief three: I can use my IRA to fund it later. Qualified charitable distributions can't go to a donor-advised fund, so that route is closed even after age 70½.
Belief four: an appraisal is needed for anything over $5,000. Publicly traded securities are an exception to the IRS qualified-appraisal rule, though Form 8283 is still filed.
Does your insider trading policy cover a gift of shares?
Often yes: many insider trading policies treat a gift of shares like a trade and require pre-clearance. Ask the general counsel's office or stock plan team. An answer of "only during an open window" that closes in mid-December should worry you if you're aiming for this tax year.
Section 16 officers must report bona fide gifts on Form 4 within two business days, so the legal team needs the transfer date.
Ask the stock plan custodian whether shares can move straight to the fund sponsor or must first go to a personal brokerage account. An extra hop can add one to two weeks.
Ask the fund sponsor about minimum grants, investment menus and fund fees. A sponsor that won't accept a specific-lot transfer, or takes only cash, means you'd have to sell first, which defeats the point. For the wider question of how much company stock to hold, see our article on that.
Does the math change if you're single or retire early?
Yes. Single filers face a $16,100 standard deduction (2026), so bunching clears the threshold sooner. But one person's AGI carries the full 30% limit, which can cap a large gift.
Married couples like Victor and Jeanette need itemized deductions above $32,200 before a gift adds any tax benefit, which is why bunching several years of giving matters more for them.
With a smaller balance, say $150,000 of stock, a $20,000 annual gift of shares may be enough with no fund at all. A donor-advised fund mainly helps once you want to bunch.
Early retirement opens a low-income gap that is better used for Roth conversions or gain harvesting. Late retirement keeps high-income years available for gifts.
A pre-gift check of your own accounts
Run these items against your own statements before any transfer. Newer federal rules add a floor on itemized charitable deductions and limit their value in the top bracket, so have your tax preparer run the current rules before you size a gift. All investing carries risk, and you can lose money, including the amount you put in.
- Each lot's basis and acquisition date, with more than one year held.
- No ESPP shares still inside their qualifying holding period, since gifting them is a disqualifying disposition.
- Expected AGI this year multiplied by 30%, compared with the size of the gift.
- Other itemized deductions compared with the standard deduction for your filing status.
- Whether the company's pre-clearance rules apply, and the transfer timeline.
- Cash outside the fund covering at least a year of spending.
- Gift size no larger than about five years of the giving you'd do anyway.
Planning a stock gift with Mariner Wealth Advisors
Mariner Wealth Advisors reviews your lots, your deferred compensation payout schedule and your AGI before a gift is sized, and meets clients nationwide by video or phone. Our equity compensation and concentrated stock services cover the surrounding decisions.
You'll get our fee schedule on paper before we meet. Bring your latest stock plan statement and your deferred compensation election, because the lot list and the payout schedule decide the size of a first gift. The request form starts the process.
What people ask about a donor advised fund appreciated stock
My employer offers an ESPP and I also hold shares from RSUs that vested years ago; which shares should I give to a donor-advised fund?
What happens if my company's stock drops after the shares reach the donor-advised fund?
Is giving stock to a donor-advised fund better than giving the shares directly to one charity?
Can I get shares back from a donor-advised fund if I suddenly need the money?
How many days should I allow for a stock transfer to land in a donor-advised fund before December 31?
Can I give unvested RSUs or stock options to a donor-advised fund?
Primary sources
This content is general information and education. It is not individual investment, tax or legal advice. Investing involves risk, including the possible loss of principal. Before making any financial decision about your equity awards or assets, consult a professional adviser who knows your full situation.