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 those gains when you sell. Donating shares, and replacing the shares with an additional cash investment, results in a lower embedded tax liability, while keeping your investing goals on track.
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 Publication 526 and IRS Form 8283 to determine the rules that apply to your individual tax situation.