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How Do I Determine the Value of My Transferred Stock for Tax Deductions?

1.

Donate your stock to the charity of your choice. You can either transfer your stock directly to the charity or physically deliver it in certificate form. It may take a couple of weeks for your broker to deliver the certificate to you.

2.

Get a receipt from the charity showing the date you donated the stock and the number of shares you donated. The fair market value of the stock donated is the number of shares donated times the closing price of the stock on the day the stock appears as an asset on the charity's balance sheet.

3.

Limit the amount of your donation according to the 20 percent or 30 percent limitation if necessary. Compare the dollar amount of your donation to your adjusted gross income for the year. If the amount of your donation exceeds one of these percentages, then you will have to carry the excess amount over to next year's return. The rules for this vary depending on several factors; consult IRS Publication 526 for more information.

4.

Complete Form 8283 for noncash charitable contributions. If your donation equals more than $500, you will also have to submit a copy of the receipt you got from the charity with your donation.

5.

Carry the amount listed on Form 8283 and report the amount of your donation on line 17 of Schedule A. If your total deductions on Schedule A exceed your standard deduction, then you will be able to itemize deductions.

Tips and Warnings

  • Don't hesitate to take your return to a professional tax preparer if you don't feel certain you understand this subject. The AGI percentage threshold will vary depending upon the type of charity, whether the stock is publicly traded and whether the stock is sold at a profit.


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