Gifting appreciated property (continues...)

2) Gifting appreciated property by donating directly to charity

If instead of selling the property, you donate the art directly the charity, you will receive an IRA tax deduction for the full fair market value of the art. The following calculation of the tax deduction for gifting appreciated property shows the results of gifting appreciated property directly to a charitable organization.

Charitable contribution	$2,000
Tax rate	28%
Tax savings	$560
Taxable gain	$0
Net tax savings	$560

The tax savings are significantly better with gifting appreciated property directly to charitable organizations. Giving your art directly to the charity is better for you tax savings wise. This is because you avoid the tax on the gain from the sale or the capital gains tax.