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Gifts of Appreciated Securities to University of Arkansas

Donors often give the University of Arkansas gifts in the form of appreciated stocks, bonds, and mutual fund shares instead of cash. There are substantial advantages for the donor in doing so:

  • Income tax deduction based on the fair market value - rather than the purchase price of the securities, if you own them for more than 12 months and itemize your taxes; and
  • No capital gains tax on the appreciation which would be required if you sold the securities.

How to Give Securities

The two main ways to give appreciated securities to the University of Arkansas are as follows:

Share certificates held by donors:

  1. The certificates should not be endorsed. Mail unendorsed certificates by first class or registered mail to the following address:

    Office of Development
    1002 West Maple Street
    University of Arkansas
    Fayetteville, AR 72701
    479-575-7209
  2. Send a signed stock or bond power for each certificate to the same address. You may obtain copies of stock or bond powers from your broker or banker or use the one attached to the back of this brochure. It may be copied if you are sending more than one certificate. Please mail the signed powers in separate envelopes.
  3. Include in the envelope with the certificates your letter or memo describing the securities you are giving and specifying how you would like your gift utilized, i.e., the particular school, program or other use desired. It would also be helpful to include a copy of the letter or memorandum in the envelope with the stock powers.
  4. In the event certificates have already been endorsed, please send them by insured mail or hand deliver them to the above address.

Shares held in street name (at your broker or banker):

  1. Send a letter of instruction to your broker or banker directing that the securities be transmitted by wire transfer to A. G. Edwards over the DTC system to "DTC #201" for further credit of The University of Arkansas Foundation, Inc., Account # 62426502." Send a copy of your letter of instruction to the Development Office at the address above. Please specify in the letter how you would like your gift applied.
  2. Please advise the University of Arkansas by immediately calling the Development Office at: 479-575-7209.

Additional Information

Valuation: The value of a gift of securities is the mean of the high and low prices on the date one of the following happens:

  • Securities are placed in the account in the name of The University of Arkansas Foundation, Inc.; or
  • Securities and signed stock powers are hand delivered or mailed to the Development Office at the above address.

Splitting Certificates: If your certificate is for more shares than you intend to give to the University of Arkansas, you may send the certificate in the manner described above, specifying the number of shares you wish to donate. We will follow your directions and send you a new certificate for the remaining shares. Of course, if the transaction is handled through a broker, the broker can arrange to split the certificate as directed.

Securities With Depreciated Value: Generally, it is not advisable to donate securities that are worth less than you paid for them. If selling the securities would result in a deductible loss, it is ordinarily advantageous to the donor to sell them, in order to establish a tax loss, and then donate the proceeds to the University of Arkansas.

Income Tax Deductions: While you may deduct the fair market value of your gift of appreciated securities, you are limited in any one year to a maximum of 30% of your adjusted gross income. However, any excess can be carried forward for up to five additional years (a total of six years to use the deduction).

Short-Term Capital Gain: Ordinarily it is not advisable to donate appreciated securities with short-term capital gain (owned 12 months or less) as income tax deductibility is limited to cost basis instead of market value.

Mutual Fund Shares: A gift of appreciated mutual fund shares to the University of Arkansas results in the same tax benefits as a gift of appreciated stocks or bonds. However, the procedure is somewhat different. The donor needs to obtain the form or forms from his or her broker or mutual fund company, complete them, and forward them to the University of Arkansas Development Office at the address above for completion of the University's portion of the form. The University will transmit the form to the broker or mutual fund company to establish an account in the name of The University of Arkansas Foundation, Inc., into which the fund shares can be transferred. For more
information or assistance, please contact the Office of Planned Giving at:1-800-317-7526 or 479-575-7271.

Use of Your Gift: You may specify the particular use for your gift, such as school, project, or department, or it may be unrestricted if you desire.

Securities to Fund Life Income Gifts

Securities are often used to establish life income gifts with the University of Arkansas, creating a life income for the donor, or the donor and spouse, or another individual for their combined lifetimes. Several gift plans are available. These gifts offer tax advantages for capital gains avoidance and income and estate tax deductions. The tax deductions will vary according to the plan chosen.

If you would like to discuss an outright gift of appreciated securities or one that would produce a life income, please contact us at:

Office of Planned Giving
1002 West Maple Street
University of Arkansas
Fayetteville, AR 72701
1-800-317-7526 or 479-575-7271
FAX: 479-575-2444