contribution of appreciated stock

[JoshinNC]

Assume client has NQ stock portfolio of $25,000 with $10,000 basis. Client wishes to contribute portfolio to his church (bonified 501c3). If client does not first sell stock, just re-titles portfolio in church's name is his charitable deduction $25,000 or the $10,000 basis (I'm leaning toward the $10,000). Also, if the church then sells the stock for FMV of $25,000 do they report gain of $15,000?

I think selling the stock is the smart move and then make the donation, but wanted outside opinions.

[Bees Knees]

Contribution of stock if held long term is FMV, not basis.

TTB, page 4-16:

Contributions of Property—Form 8283
Enter contributions of property on line 16, Schedule A. If used
items were given to charity, such as clothing or furniture, deduct
the FMV of the items at the time of the contribution. See exceptions
below for situations where the deduction is not based on
FMV.
Fair market value is what a willing buyer would pay a willing
seller when neither has to buy or sell and both are aware of the
conditions of the sale. See Fair Market Value Guide for Used Items,
page 4-3, for examples.
Reductions to FMV. The deduction based on FMV of property
may be reduced depending on whether the property given to
charity is ordinary income property or capital gain property.
• Ordinary income property. Deduction equals FMV minus the
amount that would be ordinary income or short-term capital
gain if the property were sold. Examples include inventory,
works of art created by the donor, and capital assets held for
one year or less. This rule limits the deduction for ordinary income
property to its basis.
• Capital gain property. Property that results in long-term capital
gain if the property were sold at a gain. Examples include
stocks and bonds held long-term and personal items such as
clothes, furniture, and automobiles. Deduction equals FMV.
The deduction is reduced by the amount of appreciation if any
of the follow is true:
– The property is contributed to certain private non-operating
foundations (not including qualified appreciated stock).
– The 50% AGI limit is used instead of the special 30% AGI
limit.
– The contributed property is tangible personal property that
is put to an unrelated use by the charity, such as a painting
donated to a charity that immediately sells it after receiving it
from the donor.
Exception: Fair market value of a contribution is not reduced if
the ordinary income or capital gain is included in the taxpayer’s
income in the same year as the contribution. An example would be
the donation of an installment note to a qualified organization.
Exception: Fair market value may be reduced for donations of
motor vehicles, boats, and airplanes. See Vehicles, Boats, and Airplanes,
page 4-20.

[joanmcq]

What does the fact that its NQ stock have anything to do with it? Has he exercised the option yet?

[JoshinNC]

My bad.

What does the fact that its NQ stock have anything to do with it? Has he exercised the option yet?

It's not a NQ stock option. I was just trying to indicate that it is held in a taxable account as opposed to an IRA or other tax deferred vehicle.