Giving low-basis company shares to charity: the Kestrel Bay Retirement Advisors approach

What does donating appreciated stock cover, and who usually needs it?

Take Rafael, a hypothetical example: 55, divorced, an engineering manager at a hardware company, with a daughter in college. He has bought ESPP shares for 15 years and writes cash checks to charity each December. If he later sells shares to raise money, he pays tax on gains he could have given away. On the numbers below, selling first costs him $10,500.

The work itself is four jobs. We choose which lots to give, based on holding period and gain. We open the donor-advised fund or pick the charity account that will receive the shares. We arrange the in-kind transfer from your brokerage. And we assemble the paperwork your tax preparer needs in the spring.

You're the typical case if you already give a few thousand dollars or more a year and hold shares worth several times what you paid. Rafael's $650,000 of stock carries under $150,000 of basis, which is about as classic as it gets.

Before Kestrel Bay Retirement Advisors suggests any gift, it writes down two numbers for each lot. One is the tax you'd owe if you sold it. The other is what the deduction is worth in your bracket this year, compared with your first years of retirement.

What could a stock gift save Rafael in his last salaried year?

Say Rafael is 59, single, and expects $300,000 of adjusted gross income in his last year on salary. He usually gives about $15,000 a year in cash. This year he instead moves $90,000 of his oldest ESPP shares into a donor-advised fund, which covers six years of giving. Those shares cost him $20,000 including the small discount, so the gain is $90,000 minus $20,000, or $70,000. At an assumed 15% federal rate, that's $10,500 of tax that never happens.

The deduction fits too. The cap is 30% of $300,000, which equals $90,000, so the whole gift counts this year. At an assumed 32% rate it's worth $28,800. His $90,000 of cash stays in the bank.

In the table, the same $90,000 leaves his household every time. Only the direct gift avoids tax now and leaves no gain behind in the shares.

ESPP shares carry one detail people miss: a gift counts as a disposition. If the shares are past two years from the grant date and one year from purchase, the gift still reports the original purchase discount as ordinary income. If not, the full gap between market price and price paid on purchase day gets reported. Rafael's $20,000 basis already includes the small discount.

Timing matters for a single filer. After he retires, his income and the 30% cap both shrink, and $15,000 of gifts a year may not even beat the $16,100 standard deduction for 2026. Packing six years into one high-income year is what makes the deduction count. One more benefit: shares given now are shares he won't have to sell at 63, when income starts setting his Medicare premiums.

The rule we apply: if you'll give a few thousand dollars or more this year and own shares past the one-year mark that are worth well above cost, give the highest-gain lots and keep your cash. Shares held a year or less, or underwater, stay out of the gift. Sell the losers, take the loss, and donate the cash. Investing involves risk, including loss of principal.

What should you ask before hiring anyone to handle a stock gift?

A good advisor answers these without hedging. Ask them in the first meeting, and notice who has to look something up.

• Will you rank my lots by gain per dollar and holding period, and show me which ones you'd never give? A solid answer covers lots held a year or less, where the deduction drops to basis, and lots below cost, which are better sold for the loss before you give the cash.
• Who sends transfer instructions to my custodian and the charity, and what's your cutoff date? Shares must land in the charity's account by December 31, and a transfer can take a week or more, longer in December.
• How will the gift appear on my return? Noncash gifts over $500 go on Form 8283. Publicly traded stock needs no qualified appraisal, but your preparer needs the date, share count and value.
• How do you verify my ESPP basis before choosing lots? Employer 1099-B basis is often understated, and another page on this site covers the fix.
• How are you paid, and will I see the fees on paper before I agree to anything?

How Kestrel Bay Retirement Advisors works through a stock gift, step by step

Here is the sequence our team follows, from first documents to the record your preparer files.

• Step 1, gather lot detail: our team pulls grant date, purchase date and price paid for every ESPP lot from your equity plan portal and brokerage statements, plus last year's tax return.
• Step 2, rank the lots: your advisor puts the highest gain per dollar first and flags any lot held under a year or trading below cost. You receive a one-page lot list.
• Step 3, estimate the year's taxes: the deduction under the 30% cap, any five-year carryforward, the ordinary income an ESPP gift triggers, and the tax those shares would cost if sold. We compare all of it against giving cash from savings.
• Step 4, set the timing: your advisor checks vest and purchase dates, your planned retirement year and the two-year lookback for Medicare premiums. We'd rather move shares by mid-November, because December transfers are the ones that slip past year-end.
• Step 5, handle the transfer and the record: we prepare the instructions and confirm receipt with the charity or fund. You get a written summary of shares, dates and expected deduction for your tax preparer.

Planning a stock gift with Kestrel Bay Retirement Advisors: first steps

Start with the request form on kestrelbayretirement.com. We don't publish a phone number, so the form is the way in. Then we meet by video or phone, whichever suits you, wherever you live in the US.

The firm's minimum is $400K in investable assets, and we put our fees on paper before you engage us. We'll also tell you plainly if a stock gift won't help you.

That limit is real. If you'll take the standard deduction anyway ($16,100 single for 2026) and won't bunch years of giving together, a stock gift does little. A donor-advised fund gift is also irrevocable, and the fund can't pay tuition, event tickets or any benefit to you, so it doesn't replace saving for a child's college bills.

For the first call, have your latest brokerage statement, your ESPP purchase history, your most recent return, and the names of any charities or donor-advised fund you already use. Kestrel Bay Retirement Advisors serves 2,600 clients with $910 million in client assets as of 10/5/2026.