1. Giving appreciated stock you’ve held for more than a year is better than giving cash.
If you donate stock that has increased in value since you bought it more than a year ago – and if you itemize deductions — you can take a charitable deduction for the stock’s fair market value on the day you give it away. You’ll also avoid capital-gains taxes on the increase in value over time, which you would have had to pay if you sold the stock and then gave the charity the cash proceeds. You can deduct the fair market value only if you hold the stock for more than a year before giving it away. If you’ve held it for less than a year, your deduction is limited to your cost basis — what you paid for the stock — not the current value.
2. If it’s a losing stock, it’s better to sell it and give the cash.
If the stock has lost value, it’s better to sell the stock first and then give the cash to the charity. You’ll still be able to deduct your charitable donation if you itemize, but you’ll also be able to take a capital loss when you sell the investment.