Charitable Contribution of Securities

May 22, 2006 2 Replies
C

I made a charitable contribution of some mutual fund shares by transferring the shares from my account to the charity's account. This allows me to take the value of the shares on the day of the transaction as a charitable contribution, but I don't have to claim any capital gains for these shares that were transferred. I can simply remove the shares, but I don't know how to show the cash value of the contribution in my contribution budget category. If I treat the transaction as a sale and then a cash contribution, it would show up as a capital gain. This would not be correct. How do others handle this type of transaction?



Chuck


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D

Once you know the exact dollar amount and date of the donation, do the following:

1) Use the Q "remove shares" transaction, using the date of the gift as the removed date. You'll probably want to remove shares with the LOWEST cost basis. 2) Use the Q "add shares" transaction to return the shares to the same portfolio, as of the same date. The "Price Paid" and the "Total cost" should be your DONATION amount. Taken together, steps 1 & 2 increase the cost basis of the donated shares to your donation amount, thus elimanating any CapGn on them. 3) Sell the newly added shares for the amount of the contribution. 4) Transfer the cash from step 3 to your "Charitable Contrib" category.

db

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