Donate appreciated long-term stock instead of cash to a charity. When this is done, a deduction for the full fair market value of the shares can be taken and there will be no capital gains tax on the stock’s appreciation.
You own 100 shares of stock purchased 10 years ago for $15 per share. When you donate the shares, now worth $50 each, you deduct the full $5,000 fair market value, not your $1,500 cost. You also avoid paying capital gains tax on the $3,500 of appreciation in the shares. In addition, financial aid income is $3,500 less than it would have been if the stock were cashed in increasing financial aid eligibility by $1,645 ($3,500 x 47%).
If you are in a financial aid income assessment rate of 47%, you could increase your financial aid eligibility up to $470 for every $1,000 of income reduction by donating appreciated long-term stock instead of cash to a charity.