The Complete Guide to Donating Amazon Stock as an Employee

With the holiday season approaching and the year drawing to close, many Amazon employees are looking for meaningful ways to embrace the spirit of giving. For those who have accumulated a significant position in Amazon stock, there’s a unique opportunity to make a significant impact through charitable contributions.

As a key member of the so-called “Magnificent Seven” tech stocks, Amazon’s stock price has appreciated significantly over the last year, becoming a dominant component of the S&P 500 Index and many shareholders’ portfolios. If you’re looking to diversify your investments, reduce your potential tax bill, or simply support a cause close to your heart, donating your Amazon shares can amplify your philanthropic reach while unlocking valuable financial planning benefits.

In this guide, we’ll explore how Amazon employees can effectively donate vested shares of company stock to charity. By gifting the shares you’ve acquired, you can embody the true spirit of the holiday season through strategic giving while realizing potentially significant tax benefits.

Financial Benefits of Donating Stock to Charity

When you hold stock in a taxable account, any increase in value above your original cost basis is subject to capital gains taxes. These taxes can significantly reduce your profits when you decide to sell your shares.

One way to bypass the capital gains tax is to gift your shares to a charity or a donor-advised fund (DAF). Donating stock has other potential advantages, including:

• Potential Income Tax Deduction. When you donate stock to an eligible charity, you can also take a tax deduction for the stock’s full market value at the time of donation, subject to IRS conditions and limitations. By offsetting your taxable income, this deduction can potentially move you into a lower tax bracket or meaningfully reduce your tax bill. Keep in mind you must itemize deductions on Schedule A of your tax return to claim this tax deduction.

• Amplified Philanthropic Impact. By donating appreciated shares, the charitable organization receives a larger gift than if you had sold the stock, paid capital gains tax, and then donated the cash.

• Portfolio Diversification. Accumulating a concentrated position in company stock can expose you to significant risks. Donating shares offers an opportunity to diversify your portfolio without having to sell the stock outright.

• Bypass the Wash-Sale Rule. Generally, tax laws prevent investors from selling shares and repurchasing the same stock within 30 days. However, with stock donations, you can immediately repurchase the same stock at its fair market value and reset your shares at a higher cost basis.

Choosing a Charitable Organization

Before you donate, be sure to confirm that the receiving organization is a registered 501(c)(3) charity. This designation is for tax-exempt, nonprofit organizations that can legally accept tax-deductible charitable donations.

Online resources like Charity Navigator can also help you evaluate the efficacy and transparency of the charities you’re considering, thereby maximizing your philanthropic impact.

Who Can Donate Amazon Shares

Amazon employees can transfer vested shares of Amazon stock from their Morgan Stanley at Work stock plan account to a third party, including publicly registered charities and donor-advised funds (DAFs). The specific donation process depends on the value of the shares you transfer, as well as the type of recipient and its location.

Donating $100,000 Worth of Amazon Stock or Less

For those who wish to donate shares with a market value of $100,000 or less to a U.S. charity or DAF, the process is as follows:

• Call the Morgan Stanley Service Center at +1 (866) 533-2575 to instruct the transfer. You don’t need to fill out any paperwork.

• Be prepared to provide the agent with the name of the charity, DTC number, account number, and account title. You can generally obtain this information from the charitable organization you wish to support. Be sure to confirm that the charity can accept non-cash donations before instructing the transfer.

Keep in mind that if you plan to donate more than $100,000 worth of Amazon stock, you may not break up the donations into multiple under-$100,000 transfer requests. Instead, you’ll need to follow the instructions for donating more than $100,000 worth of Amazon stock.

Donating More Than $100,000 Worth of Amazon Stock

For those who wish to donate more than $100,000 worth of Amazon stock to a U.S. charity or DAF, the process is as follows:

• Complete Morgan Stanley’s Letter of Authorization for Stock Transfer (U.S. & Canada). You’ll need to provide your personal information and instructions for transferring your shares, including the name of the receiving firm, DTC number, account title and number, and the number of whole shares you plan to transfer.

• For charitable donations, you must also include an enlarged copy of the printed and signature side of a government–issued photo identification document. For joint accounts, both others must submit ID.

• You have two options to submit your completed Letter of Authorization:

  • Mail or fax it to Morgan Stanley / Global Stock Plan Services (instructions are provided at the bottom of the form). Keep in mind that Morgan Stanley will not be able to complete your transfer request until they speak with you directly to verbally verify the request and prevent fraud.

  • Call the Morgan Stanley Service Center to request that they send you the form via Secure Email. You can also return the completed form via Secure Email.

How Long Does It Take to Complete Your Donation Request?

It’s a good idea to submit your request well in advance of the date you’d like to make the transfer as processing times can vary. However, for those donating more than $100,000 worth of Amazon stock, submitting your Letter of Authorization electronically generally allows for faster processing.

If you speak with a Morgan Stanley agent to initiate your donation request, be sure to ask for the estimated date of transfer during your call.

Pitfalls to Avoid When Donating Amazon Stock

If you’re donating more than $100,000 worth of Amazon stock, Morgan Stanley won’t be able to process your request if your signature on the Letter of Authorization doesn’t match the name on your government-issued ID. If you’re concerned about your signature matching, Morgan Stanley suggests one of the following:

• Provide alternate ID such as a government-issued passport.

• Have the Letter of Authorization notarized.

• Request that the receiving account broker-dealer provide a Medallion Signature Guarantee stamp on the Letter of Authorization.

It’s also important to note that Amazon’s plan rules require employees to contact Amazon’s Legal Department at [email protected] to gift Amazon securities. If you’re subject to the trading window or preclearance, you may only donate Amazon securities during the trading window, unless you can make certain legal representations concerning the gifted shares.

Lastly, all donations of Amazon shares to a charity or donor-advised fund are subject to Amazon’s Insider Trading Policy.

Contact Simplicity Wealth Management to Maximize Your Impact and Financial Benefits

Donating stock to charity can be a powerful tool in strategic financial planning, offering unique advantages over traditional cash donations. For Amazon employees, it presents a way to achieve your charitable giving goals while potentially realizing valuable tax savings and other financial benefits.

Despite the potential advantages, navigating the nuances of stock donations can be complex without an experienced guide. To make the most of your charitable contributions and remain compliant with Amazon’s plan rules, consider consulting with Simplicity Wealth Management.

Simplicity Wealth Management is a fee-only financial planning firm specializing in the financial planning needs of busy tech professionals with equity compensation. We can help you develop a comprehensive plan to maximize your financial resources and set you on a path to financial independence. To begin your financial journey, we invite you to schedule an introductory call.