Q2007: How to donate appreciated stock


J

John Bissell

I donated some appreciated stock to charity. If I use the "Remove Shares"
option on the account, the gain shows up as a capital gain. I don't see an
option that lets me remove selected shares from an account and yet not have
them show as a gain.

John
 
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T

TomYoung

I donated some appreciated stock to charity. If I use the "Remove Shares"
option on the account, the gain shows up as a capital gain. I don't see an
option that lets me remove selected shares from an account and yet not have
them show as a gain.

John
I have Q2007, too. If I do a Removed action on appreciated stock I'm
not seeing any realized gains on a Capital Gains report. The report
shows gross proceeds equal to cost basis, for a $0 gain.

It sounds like you're doing something more than a simple Removed
action here.

Here's one way to make the accounting work in the sense of showing a
charitable donation equal to the appreciated value of donated stock:

(I'll assume market value of donated stock is $5,000.00 and the
stock's basis is $1,373.68 for an unrealized gain of $3,626.32.)

1)Do a Return of Capital transaction for this stock, entering the
amount of unrealized gain ($3,626.32) as a *negative number* and
specifying that the transfer account is the same account in which the
security is held. Result: the cost basis of the stock is increased to
the market value( $5,000.00) and there's no change in cash in the
account.

2)Do a sale of the stock at market value. Result: No gain or loss on
sale, cash in account increased to $5,000.00, stock is out of account.

3)Do a MiscExp transaction for $5,000.00 with an offset to "Charity."
Result: Cash in the account is reduced by $5,000.00 and an expense of
$5,000.00 to Charity is created.

Of course, the cash flows are entirely fictional but you end up where
you want to be.

Tom Young
 
Z

Zaidy036

I have Q2007, too. If I do a Removed action on appreciated stock I'm
not seeing any realized gains on a Capital Gains report. The report
shows gross proceeds equal to cost basis, for a $0 gain.

It sounds like you're doing something more than a simple Removed
action here.

Here's one way to make the accounting work in the sense of showing a
charitable donation equal to the appreciated value of donated stock:

(I'll assume market value of donated stock is $5,000.00 and the
stock's basis is $1,373.68 for an unrealized gain of $3,626.32.)

1)Do a Return of Capital transaction for this stock, entering the
amount of unrealized gain ($3,626.32) as a *negative number* and
specifying that the transfer account is the same account in which the
security is held. Result: the cost basis of the stock is increased to
the market value( $5,000.00) and there's no change in cash in the
account.

2)Do a sale of the stock at market value. Result: No gain or loss on
sale, cash in account increased to $5,000.00, stock is out of account.

3)Do a MiscExp transaction for $5,000.00 with an offset to "Charity."
Result: Cash in the account is reduced by $5,000.00 and an expense of
$5,000.00 to Charity is created.

Of course, the cash flows are entirely fictional but you end up where
you want to be.

Tom Young
Asimpler method is to use Share Removal and then in one of your other
accounts (I use a checking a/c) add a Deposit for $0 and split like this:

1. A Misc. Expense Cash Offset equal to the value of the donation.
2. A Donation in the same amount but negative.
NOTE: this is a negative amount since Donations are an Expense

Eric

Eric
 
T

TomYoung

Asimpler method is to use Share Removal and then in one of your other
accounts (I use a checking a/c) add a Deposit for $0 and split like this:

1. A Misc. Expense Cash Offset equal to the value of the donation.
2. A Donation in the same amount but negative.
   NOTE: this is a negative amount since Donations are an Expense

Eric
Yes, that's simpler, but you end up understating your Misc. Expense
line by the amount of the donation.

Tom Young
 
Z

Zaidy036

Yes, that's simpler, but you end up understating your Misc. Expense
line by the amount of the donation.

Tom Young
But that is not an item that affects taxes.

You could set up an item specifically for donations off-set
 
B

B

I donated some appreciated stock to charity. If I use the "Remove
Shares" option on the account, the gain shows up as a capital gain. I
don't see an option that lets me remove selected shares from an account
and yet not have them show as a gain.

John
Here's another, simple, approach to dealing with the situation. But
first, if you're simply doing a Remove shares transaction for the
donated stock you should see no capital gains for those shares. SO if
that isn't happening I think you need to be sure you're using the right
transaction type.

Then, if you use It's Deductible, just enter the stock transfer
information there and TurboTax will pull in the information
appropriately for you income tax reporting.

Hope that helps.
 
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J

John Bissell

Thanks, everyone. I misspoke about the capital gains: A Capital Gains report
in Q2007 showed the removed shares but had the basis and sales price as the
same, thus no actual capital gains. The report did show those shares and I'm
sure TAT would have picked it up. I may try one of the suggested workarounds
but it would certainly be nice if Intuit made a provision for this very
common transaction. There seems to be a dearth of actual improvements from
release to release while a transaction like this isn't covered.

John
 

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