We donated some stock shares in-kind to a charity this year. We transferred the shares without selling them, so there is no mention of it on our 1099-B. I think the only effect this has on our taxes is the donation amount of the value of the stock at the time we transferred it to the charity. Is that right? No special forms?
Okay - this is confusing. You say you donated the stock ‘this year’ which is 2024 (last time I checked). Then it’s not mentioned on your 1099-B - which would be for 2023. So did you donate the stock in 2023 or in 2024?
You need to have a receipt from the charity for the stock showing which security, the number of shares, and the value as of the date donated. Then, on your tax return, you will need to take a deduction on Schedule A and your deduction is limited to 30% of your AGI, although you can carry forward excess deduction amounts for up to 5 years.
I will also point out that if you had not held the stock for at least 1 year and 1 day before you donated it, your deduction is limited to the purchase value, not the value of the stock on the date that it was donated.
IRS Pub 526 p526.pdf (irs.gov) has information about charitable giving.
AJ
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This is very interesting. I didn’t know it has to be “long term” before it becomes deductible in full. Also, what if it is stock that was received from an employer? Perhaps from RSUs? And you only held it for a few months? I suppose when an RSU vests, its basis is the amount you are taxed on.
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From Pub 526:
Well, there are lots of different ways to get stock from your employer - RSUs, restricted stock, NQSOs, ISOs, 401(k) NUA and ESOP, to mention a few. You would follow the rules for the acquisition date on whatever the way it was that you acquired the stock, and would need to hold the stock for a year and a day after the acquisition date for the appreciated stock to be considered a “capital gains property” (donation valued at FMV as of the date of the donation) vs. an “ordinary income property” (donation valued at cost of acquisition).
For RSUs in particular, you acquire that set of shares when the stock vests, so you would have to hold the shares for a year and a day after vesting before donating, while for a 401(k) NUA, the shares would be considered long term as of the date they were distributed from the 401(k), but if donated in less than a year and a day, any gain/loss from the NUA basis would be short-term. So, that’s one of those properties that would be split between capital gains property and ordinary income property.
AJ
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AJ,
Yes, it was 2023. (Sorry - I was in a hurry while typing this yesterday.) It was held multiple years. Thanks for letting me know what documentation I need plus other good info for possible future situations!
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