donation of stock to charitable organizion from privately held IRA. why do you ask for info on original purchase amount

[ebroadhurst]

I have donated common stock from my IRA account to a church.  Turbo Tax asks me to input the original cost of the stock.  capital gains should not be involved and the value of the stock when sold by the church should be the deductible donation.  how do I enter this

[dmertz]

No part of the entry process for a Form 1099-R asks for this, including if the contribution was made as a QCD by an in-kind transfer of stock.  If the contribution is a QCD, it is not reportable in the section for Charitable Donations under Deductions & Credits.

Is this contribution not a QCD such that it must be entered as an ordinary charitable contribution deductible on Schedule A instead?  If so, the Form 1099-R would be reported on your tax return as a taxable distribution from the IRA to you, and a subsequent charitable contribution to the church.  In that case, your basis in the shares in your possession is the value of the shares distributed and the holding period begins on that date.  Under this scenario I assume that the donation was made less than a year after distribution from the IRA, so the holding period would be short-term.

[user17722921967]

I have the same situation. I donated some stock I’ve held for a long time to my church. Had I sold them I would have paid taxes on sizable  capital gains .  I also noted they asked for my original purchase price, which is irrelevant , but I entered if and they didn’t use it to compute capital gains. 

[DaveF1006]

It depends. Your original purchase price is the basis for your stock. Even though your donation was based on Fair Market Value (FMV) and it was more than $500, IRS requires Form 8283 (Noncash Charitable Contributions). If you look at that form, Column (g) specifically asks for the "Donor's cost or adjusted basis. 

Even though you get to deduct the full Fair Market Value (FMV) and skip the capital gains tax (the "double tax break"), the IRS still wants to see your basis on Form 8283.  To get the FMV deduction, you must have held the stock for more than one year. By asking for the date and price, the software is triple-checking that you aren't trying to deduct a "short-term" gain (which would be limited to your cost basis).

So your cost basis is relevant if the stock donated was more than $500 and requires Form 8283.

@user17722921967