Client transferred stock to Church for his contributions for the 2104 year. He rec'd letter from stock broker informing him of the transfer to the church account and the FMV of the transfer on that day. When he received his contribution statement from the church, it is about $1300 less than FMV. What contribution does he get? the $5000 FMV amount on the day given, or the amount they actually received when they sold it ($3700)?
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The amount to deduct is the value on the date of the gift. To be more specific the average price between the high and low on the date of the gift is used to determine the deductible amount. The donor can't control when the church will sell the stock, and the church should have provided a letter with the number of stocks donated rather than a dollar amount. -
Vote for receipt value
I've had similar scenarios. . ."markets change."Originally posted by JenMO View Post
While it is indeed a gray zone, I take the approach that the true value of the "donation" is that which existed when the church received the stock. (Also, the church et al generally sell stock gifts and pocket the $$ for their charitable uses.)
Where confusion can occur is if there is a considerable time period between the "gift" and the church's value as shown on the obligatory contribution receipt.
So . . .what would you do if the guy donated stock worth $1,000 when he told the broker to move the (imaginary) certificate but due to a subsequent buy-out offer the stock was worth $2,000 when the church received it? The Lady or the Tiger ??
This excerpt from Publication 561 might be of use:
Stock. If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. If the certificate is mailed and received through the regular mail, it is the date of mailing. If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation.
The value of stocks and bonds is the FMV of a share or bond on the valuation date. See Date of contribution, earlier, under What Is Fair Market Value (FMV).
Selling prices on valuation date. If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. You get the average price by adding $11 and $9 and dividing the sum by 2.
Oh yes: Don't forget this jewel - "But if you donate stock you've owned for a year or less, you typically can deduct only your cost, not the market value."
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Stock had been owned for years, what line on the Sch A should it be put? the 8283 part A?Comment
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On further review
Oops - I just reread the highlighted area above.Originally posted by JenMO View Post
If there was, indeed, a brokerage account that the church owned for direct transfer (or that a physical stock certificate - think dial-up internet mentality - was issued to the church) then the broker's valuation numbers appear to govern.
You still might want to check with the church to hear their version of what happened. . . . .especially if there is some wiggle room with broker in confusion of "transfer from" versus "transfer to."
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Reporting stock donation
That's where I've always placed such a donation.Originally posted by JenMO View Post
Your tax software should lead you, either via pull-down menus or (if new territory for you) going through the applicable Q&A.
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