Quick answer
Should I donate stock, donate cash, or sell first?
If the stock has gained and you have held it more than a year, donate the shares directly: you deduct full market value, up to 30% of AGI, and never pay the gain tax. Selling first and giving cash costs you that tax. Give cash only for losing positions, short-term holdings, or small gifts that qualify for the 2026 non-itemizer deduction.
Key takeaways
- 01Long-term winner: donate the shares.
- 02Loser: sell, take the loss, donate the cash.
- 03Short-term or tiny gift: cash is usually simpler and just as good.
- 04Want to keep the position? That is an investment decision, not a gift; consider an in-kind §721 contribution.
| Best for long-term gains | Donate the stock |
|---|---|
| Best for losses | Sell, then give cash |
| Stock AGI limit | 30% (public charity or DAF) |
| Cash AGI limit | 60% (public charity) |
| Paperwork | Acknowledgment from $250; Form 8283 above $500 |
| Keep + Embark | $0 tax at contribution; no deduction; 3-year lock-up |
The Short Answer
Is it better to donate stock or cash?
If you have stock held more than one year that has gained in value, donating the shares directly is usually best: you deduct the full market value (up to 30% of AGI) and never pay the capital gains tax. Selling first and donating the cash costs you that gain tax. Cash is better only for losing positions, short-term holdings, or small gifts that qualify for the 2026 non-itemizer deduction.
This checklist closes our series on donating appreciated stock. It draws on DAFs, 2026 deduction limits and bunching.
Run Your Numbers
What does each choice cost after tax?
The calculator assumes you itemize and your gift is above the 0.5% floor. It compares giving $V of stock with selling it first, and shows the targeted income if you keep the position and contribute it to Embark instead.
Calculator
Donate stock vs sell-then-donate vs keep
Enter the position value, its cost basis, your ordinary rate (top-bracket benefit is capped at 35% in 2026) and your capital gains rate (23.8% = 20% + 3.8% NIIT).
Total tax benefit: donate shares
–
Extra cost: sell, then donate
–
Keep + Embark: targeted income/yr
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Illustrative only; not tax advice. Assumes itemizing, long-term holding, gift within the 30%-of-AGI stock ceiling and above the 0.5% floor; ignores state tax. Embark income is a 10% target, not a guarantee, contributed shares have a 3-year lock-up, and Embark is for accredited investors.
Chart
Net cost of a $1M gift to charity (defaults)
The Checklist
Which option fits your situation?
Held more than one year with a gain? Donate the shares.
Fair market value deduction, no capital gains tax. This is the default for long-term appreciated stock.
Held one year or less? Give cash or wait.
Gifts of short-term property are deductible only at basis. If you're close to the one-year mark, wait.
Trading below basis? Sell, then donate cash.
Donating a loser wastes the capital loss. Sell, harvest the loss, give the proceeds.
Restricted, private or pre-IPO stock?
The rules change: appraisals, basis-only deductions to private foundations, transfer restrictions. See donating restricted or private stock.
Not itemizing this year?
Give up to $1,000/$2,000 in cash directly to operating charities, or bunch stock gifts into a DAF in one year.
Gift above 30% of AGI?
Excess stock gifts carry forward 5 years. Mixing stock (30%) with cash (60%) can use more of the ceiling now.
Want income for life plus a gift?
Consider a CRT. Compare lead vs remainder trusts and CRT vs Embark.
Not ready to give it away, but need income or diversification?
Keep the shares and consider an exchange-style contribution such as Embark rather than selling.
Where Embark fits
You've picked what to give. Now price what you keep.
Selling the rest costs you capital gains tax. Run your ticker to see what the position could target in income instead.
- Like donating shares, an Embark contribution avoids tax at transfer
- Unlike a gift, you keep the position and its upside
- Targets 10%+ annual income; accredited investors only
Run the numbers
Live prices · takes under a minute · no obligation
Side by Side
Donate stock vs cash vs sell vs keep
| Option | Tax effect | Best when |
|---|---|---|
| Donate shares | FMV deduction (30% AGI cap); no gain tax | Long-term, low-basis stock and real charitable intent |
| Donate cash | Deduction up to 60% of AGI; stock gain stays embedded | Losers, short-term lots, non-itemizer gifts, or you want to keep the stock |
| Sell, then donate | Pay gain tax, then deduct proceeds | Almost never for winners; right for positions below basis |
| Keep + Embark | $0 tax at §721 contribution; no deduction | You want targeted 10%+ income and upside instead of a gift |
$1M position, $150K basis
Sell, then donate
$202,300
Capital gains tax paid
$850K gain × 23.8%. That money never reaches charity or you.
Donate shares, rebuy with cash
$0
Gain tax
Same deduction, same charity gift, and the new shares carry a $1M basis.
The Swap Trick: If you love the company, donate the low-basis shares and use the cash you would have given to buy the same stock back. You end up with the same position at a fresh, higher basis. There is no wash-sale issue because the wash-sale rule applies only to losses.
Keeping the Rest
When keeping and contributing to Embark makes sense
Giving is the right answer for the part of your wealth meant for charity. For the concentrated position you keep, selling triggers the same gain tax shown above. Embark contributes the shares to an SPV under Section 721, an in-kind partnership contribution with $0 tax at contribution, targets 10%+ annual income and keeps your upside. It is for accredited investors, income is targeted rather than guaranteed, contributed shares have a 3-year lock-up, and there is no charitable deduction. Read the cost of selling appreciated stock for the full math.
Chart
Capital still invested from a $1M position you keep
FAQ
Frequently asked questions
Is donating stock always better than cash?
For long-term appreciated stock, yes in almost every case. For stock below basis or held a year or less, cash is better.
What is the deduction limit for donated stock?
30% of AGI for long-term appreciated stock to public charities and DAFs (20% to private foundations), with a 5-year carryforward. Cash to public charities is limited to 60%.
Does the 2026 0.5% floor change the answer?
No. It reduces the deduction for any gift type equally. It makes bunching more attractive.
Can I get a deduction from Embark?
No. Embark is an investment structure, not a gift. It defers tax at contribution and targets income; the charitable options create deductions.
What paperwork do I need?
A written acknowledgment from the charity for gifts of $250 or more, Form 8283 for noncash gifts over $500, and a qualified appraisal for non-public stock over $10,000.
What if I hold several lots of the same stock?
Give the lot with the lowest basis that you have held more than a year. Tell your broker which lot to transfer in writing.
Is giving stock to family better than giving it to charity?
It solves a different problem. Family gifts move value but carry your basis and give no deduction; see our gift tax guide.
Can I combine a stock gift and an Embark contribution?
Yes. Many holders give part of a position and contribute the rest, so one decision does not have to cover every share.
Sources
Primary sources
Sources
Cite this article
Embark Funds Research. “Donate Stock, Cash or Sell? The 2026 Checklist.” Embark Funds, updated October 15, 2026. https://www.embarkfunds.com/insights/donate-stock-vs-cash-vs-sell-checklist
Not tax, legal or securities advice: This article is educational. Charitable, securities and tax rules depend on your facts and your company's policies. Work with a CPA, an estate attorney and, for insiders, securities counsel before acting. Embark income figures are targets, not guarantees, and contributed shares have a 3-year lock-up.
Charitable Giving with Appreciated Stock Series
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Keep What You Don't Give
Make the Stock You Keep Pay You
Donate the shares charity should get. For the rest, Embark's §721 in-kind contribution triggers $0 tax at contribution and targets 10%+ annual income while you keep the upside. Accredited investors only; income is targeted, not guaranteed, and contributed shares have a 3-year lock-up.