Securities Held in Street Name at a Bank or Broker
If your securities are with a bank or broker, you can transfer your shares to the College by Depository Trust Company (DTC) wire. You can notify the college of your intended gift by completing the securities transfer form. After submitting the form you will receive an email confirmation that you may send to your broker. You may wish to review the “Important Additional Information” below to determine whether you should discuss your gift with the College prior to submitting the form.
Please note the gift of securities is complete when you, and your transfer agent, have delivered the securities to Williams – this means that you no longer have control of them. Merely instructing your transfer agent to complete the gift is not enough to satisfy the IRS legal requirement. The College absorbs all transfer costs.
Physical Securities Held by You
If the certificates are in your possession, mail them to Williams with a Stock/Bond Power (pdf).
. The certificates should be left unsigned.
. The stock power should be signed and left blank (the form will be filled in by Williams). Your signatures must be signature guaranteed.
. If the certifcates are for more shares than you wish to give, please see instructions under Split Certificate below.
. Send a securities_transmittal (pdf) to the office recited below.
. Use two envelopes. Place the certificates in one envelope and the stock power in the other. A copy of the transmittal letter should be placed in each envelope.
Important Additional Information
Excise Tax on Donated Securities
The Tax Cuts and Jobs Act of 2017 imposes on Williams College (and certain other private colleges and universities) a 1.4% excise tax on net investment income starting July 1, 2018. According to 2019 IRS guidance, this tax extends to the realized gains on sales of gifts of appreciated securities. The gain is calculated based on “carryover basis” – which is your total cost basis in the donated securities.
To assist the College in calculating the tax liability arising from this new tax, we are requesting that you provide to us the total cost basis for your securities. If you do not know the cost basis, the College will use a zero cost basis when calculating the realized gain on the sale of
Any information you can provide can assist us to calculate and potentially reduce the effect of the excise tax. The College very much appreciates you sharing this information.
The gift value of the securities is the mean of the high and low price on the date one of the following occurs:
- The securities are transferred via DTC wire to Williams; or
- The securities are placed in the President and Trustees of Williams College account at your brokerage firm (transfers to a bank’s shared charitable gift account do not accomplish the transfer), or
- The securities and stock powers are deemed hand-delivered (date of receipt), mailed through private or US postal delivery service (date of receipt), or mailed through the US Post Office via regular mail (date of later postmark) in negotiable form to Williams or its agent.
If you would like your gift of stock divided among a variety of purposes at the College, advise the Controller’s Office when making your gift and the stock will be allocated according to your wishes. If one of the purposes is a life income gift, please link to gifts of securities to life income fund before initiating the process.
In general, it is not advisable to give securities that are presently worth less than you paid for them. If the sale of stocks or bonds would result in a deductible loss, it is usually to your advantage to sell them to establish a tax loss and then donate the proceeds to Williams.
You may have a certificate for more shares than you want to give to Williams. If so, send the certificate and a signed stock power in the manner described above. (Do not state the number of shares to be transferred on the stock power.) Include in your letter accompanying the shares, your social security number and instructions on the number of shares you are donating. Williams will follow your instructions and send back a new certificate for the remaining shares registered in the name of the owner of the original certificate. The new certificate can take up to six weeks to complete. (Williams cannot reissue the certificate to anyone other than the original owner of the certificate). If the transaction is handled through your broker, the broker can arrange for splitting the certificate appropriately.
It is usually inadvisable to make a charitable gift of appreciated securities when your capital gain is short-term (i.e., you have owned the securities twelve months or less). Such a gift is deductible only in the amount of its cost basis, not its market value. The College’s receipt states market value no matter how long the shares have been held.
Limits on Deductibility
The ceiling on deductibility of your gift of appreciated securities is 30% of adjusted gross income. However, you may carry over any excess as a deduction for as many as five additional years.
Closely Held Stock
Making a gift of closely held stock to Williams will allow you to gain a charitable deduction for the fair market value of the stock and are not subject to the capital gain tax on any appreciation in the value of the stock. Such gift proposals must be reviewed by the Controller’s Office before the College accepts them. (NOTE: Donors need to obtain a “qualified appraisal” in order to satisfy IRS regulations.)
If you have stock subject to a tender offer, please be sure to consult with your tax advisor before making a gift.
Mutual Fund Shares
Transferring appreciated mutual fund shares provides the same tax benefits as a gift of appreciated securities, except there maybe a number of additional steps involved in the transfer, so allow sufficient time to complete the transaction.
Giving Securities While Retaining Life Income
Securities can also be used to fund a life income gift that will provide income to you and/or beneficiaries you designate for life or a term of years. There are several plans available and the tax advantages vary according to the arrangement you choose. If you would like further information on life income gifts, please contact [email protected] or go to the Gift Planning website.
PO Box 67
Williamstown, MA 01267
Email: [email protected]