If you have marketable securities that have grown substantially in value, the tax laws make it possible for you to make an important gift at a remarkably low after-tax cost.
A gift of appreciated securities generally qualifies you for an income tax charitable deduction equal to the value of the gifted securities, and it may also avoid the long-term capital gain tax on your unrealized capital gain. You can deduct up to 30% of your adjusted gross income in the year of your gift. Any amount given in excess of 30% can be carried over and deducted for up to five subsequent years.
Usually a sale of appreciated securities results in a tax on your full gain – in other words, you keep only part of the profit. But if you give those same appreciated securities to UCLA School of Law, there is no tax on your gain, even though your “profit” is counted as part of your charitable deduction.