Tax-efficiently give away appreciated shares to charitable organizations
How do I donate shares from my Betterment account?
Log into Betterment and from the navigation menu, select the taxable investment goal you wish to donate from. Once you've reached your goal Overview, select "Transfer or rollover" and choose “Give to charity.” You can then specify how much you would like to donate and to which partner charity you would like your donation to be directed. After the gift is initiated, you’ll be prompted to make an optional deposit, which would replace the donated shares to keep your goals on track, and ...Read More
When is the deadline for making a charitable contribution?
You can make a charitable contribution of shares at any time, but it will only be eligible to be deducted in the taxable year in which it is made (which ends each year on December 31). We process donations only on business days when markets are open, so we recommend making a donation no later than the second-to-last business day of the year in which you wish to claim the donation. As an example, if you’d like for a donation to be eligible to be deducted on your 2022 tax return, make sure to ...Read More
Why can't I donate to charity from Betterment's mobile app?
The charitable giving feature is not yet available on our mobile app. However, if you would like to make a donation from your web browser, you can do so by logging in. Next, select from the menu, the specific goal you wish to donate from. Then, select "Transfer or Rollover" to see the "Give to Charity" option.Read More
Can I request a Qualified Charitable Distribution (QCD) from my IRA?
Betterment can support QCDs from IRAs if you meet certain criteria. Please reach out to our team for further instructions. Please note that Qualified Charitable Distributions (QCDs) from IRAs require additional time to process and as such should be requested at least a week in advance of the December 30 deadline.Read More
Why should I consider donating shares to charity using Betterment?
If you are someone who typically donates money to charity and you have a taxable investing account with gains at Betterment, you should consider making share donations from your account rather than in cash. While both cash donations and share donations (held long term) have the same tax deduction, donating appreciated shares has an additional tax benefit: avoiding the capital gains tax on the sale of your investments. Whether you sell today or sell in the future, you’ll typically pay tax on ...Read More
Why can't I donate my short-term capital gains?
Donating shares with short-term capital gains has a lower tax benefit than donating shares with long-term gains. It’s typically better to wait to donate shares until they have been held for more than a year so that you can maximize your potential tax benefit. Because of this, we only allow customers to donate shares with long-term gains. Betterment is not a tax advisor, and the information provided here should not be construed as tax advice. It should only be used for informational purposes. ...Read More
How long do I have to hold shares to be able to donate them?
Betterment Charitable Giving will enable you to donate shares with long-term gains that have been held for more than one year from the day of purchase. In the “Give to charity” flow of a specific goal, we will calculate the dollar value of those eligible shares. You can donate any dollar amount you would like up to the eligible amount. Our algorithm will automatically select the shares to give with the biggest potential tax benefit. You can navigate to the Charitable Giving option by first ...Read More
How do we calculate the eligible balance for making a donation?
Your eligible balance is the total value of all shares in your portfolio in taxable accounts that have gains and have been held for more than a year (long-term gains). We don’t allow the donation of shares held for less than a year because the tax benefits aren't as compelling. Betterment is not a tax advisor, and the information provided here should not be construed as tax advice. It should only be used for informational purposes. Please consult a qualified tax professional and refer to IRS ...Read More
Managing my account
Which charities can I donate to through Betterment?
UNICEF, ACLU, Brooklyn Community Bail Fund, NAACP, The Trevor Project, World Wildlife Fund, Feeding America, Big Brothers Big Sisters of NYC, Boys and Girls Club of America, Breast Cancer Research Foundation, Save the Children, Wounded Warriors Family Support, Hour Children, Against Malaria, DonorsChoose, GiveWell, and more to come. You can put in a request for us to add another charity to our list.Read More
Can I donate shares from my Betterment IRA or 401(k)?
No, only shares held in a taxable account can be donated.Read More
Can you donate to charity with shares from goals using any portfolio strategy?
Yes, you can donate from any taxable investment account managed by Betterment, no matter the portfolio strategy, as long as it contains shares with long-term gains (held longer than one year).Read More
How can charities or non-profit organizations request to join Betterment's charitable giving platform?
If you represent a charity that would like to receive donations from Betterment customers, email email@example.com.Read More
Will a donation cause rebalancing in my account?
Donations of shares from your Betterment account typically will result in a decrease of one or more asset classes, depending on the shares our charitable donation selection algorithm selects to transfer. The algorithm prioritizes maximal tax benefit over the best allocation outcome, which can introduce allocation drift to your account, similar to when markets move your holdings in different directions. Because of this, our rebalancing algorithm, which checks your account daily, may seek to ...Read More
Can I donate shares from goals using Tax Coordination?
Yes, you can donate from any taxable investment account managed by Betterment, even one that is part of a Retirement goal using Tax Coordination, as long as it has long-term gains (held longer than one year).Read More
How to Determine the Tax-Deductible Value of Donated Shares
As part of optimizing your portfolio for taxes, you should assess how much of your invested money you can donate to reduce capital gains tax, instead of donating cash. When people consider donating money to charity, they have plenty of motivations for doing so, including wanting to have a positive impact on a cause they care about. They may also desire to decrease their tax liability by claiming more deductions on their tax return. When an investor transfers assets (that have increased in ...Read More
How Many Tax-Deductible Shares Can You Donate to Charity in a Year?
When you gift a security, there can be a difference between the gifted price and the amount you can deduct on your tax return. If you itemize your deductions on your tax return, you can deduct the value of charitable donations. To be more precise, you can deduct the value of any assets you give to registered charities. Donations include all kinds of valuable assets—money, food, clothing, property, and of course, securities like stocks and bonds. In order to include itemized deductions on your ...Read More
How do I find the cost basis for the donation I made through Betterment?
Betterment does not currently provide charitable donation cost basis information, but we may provide it in the future. Since Betterment only allows donations for appreciated investments held over 1 year, using a cost basis lower than the market value at the time of donation and a purchase date over 1 year ago is the only available way to move forward. In general, if you donate shares that have appreciated in value since the time of purchase and that you have owned for more than one year (which ...Read More
How do I get my receipt for my charitable donation?
We will email you a finalized tax receipt at the end of the business day that the share transfer to the charity is completed. You will also be able to find your receipt in Documents.Read More
How will donating shares to charity through Betterment affect my tax forms?
Charitable donations will not show up on your 1099-B tax statement. Since you gave away shares with gains instead of selling them, this action will not be reported to the IRS and is not a taxable event. If you itemize your deductions to take charitable deductions, you (or your tax software or accountant) will report the donation when you file your taxes. Your donation receipts, available in your Betterment account in the Documents section of Activity, will be useful in this process. Donation ...Read More
How do I report my charitable donations on my tax return?
Charitable donations are reported as itemized deductions on personal income tax returns. Taxpayers who claim the standard deduction do not report their charitable donation(s) on their tax return. Betterment optimizes tax deductions for charitable donations by only allowing our customers to donate appreciated investments held for over one year. Betterment is not a tax advisor, and the information provided here should not be construed as tax advice. It should only be used for informational ...Read More