Deductions & credits

You may have answered the questions in the Charitable Contributions section in such a way that the program classified the stock as another type of property. I recommend that you revisit the Charitable Contributions questionnaire and review your responses. 

In the case of tangible personal property, the donee needs to have included information as to whether they certified it for a use related to the purpose or function constituting the donee’s basis for exemption under Section 501 of the Internal Revenue Code

When figuring your deduction for a contribution of capital gain property, you can generally use the FMV of the property.

However, in certain situations, you must reduce the FMV by any amount that would have been long-term capital gain if you had sold the property for its FMV. Generally, this means reducing the FMV to the property's cost or other basis. You must do this if:

• The property (other than qualified appreciated stock) is contributed to certain private nonoperating foundations,
• You choose the 50% limit instead of the 30% limit for capital gain property given to 50% limit organizations, discussed later,
• The contributed property is intellectual property (as defined earlier under Patents and Other Intellectual Property),
• The contributed property is certain taxidermy property, as explained earlier, or
• The contributed property is tangible personal property (defined earlier) that:

•       Is put to an unrelated use (defined later) by the charity, or
•       Has a claimed value of more than $5,000 and is sold, traded, or otherwise disposed of by the qualified organization during the year in which you made the contribution, and the qualified organization hasn't made the required certification of exempt use (such as on Form 8282, Donee Information Return, Part IV). See also Recapture if no exempt use, later.

Contributions to private nonoperating foundations.

The reduced deduction applies to contributions to all private nonoperating foundations other than those qualifying for the 50% limit, discussed later.

However, the reduced deduction doesn't apply to contributions of qualified appreciated stock. Qualified appreciated stock is any stock in a corporation that is capital gain property and for which market quotations are readily available on an established securities market on the day of the contribution. But stock in a corporation doesn't count as qualified appreciated stock to the extent you and your family contributed more than 10% of the value of all the outstanding stock in the corporation.

See IRS Publication 526 for more information.