While I understand gifts of stock do not qualify for the tax credit, what if I donate stock and the organization immediately liquidates that and uses the cash for qualifying purposes--may I then utilize the cash-out value of the stock for the contribution tax credit?
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You're asking a question of state tax law. You might be able to call turbotax support and ask for a specialist in the area of Colorado taxes, although customer support only provides limited tax help unless you pay for an upgrade (they provide support with the program, but not much tax advice).
However, the general rule is that you do you, and you are not responsible for (and can't benefit from) decisions that you do not control. Under IRS regulations, if you donate appreciated stock to a most charities, you can claim the appreciated value, and not have to account for capital gains. (If you sold the stock and donated the cash, you would get the donation value of the cash, but you would also have to report and pay tax on the capital gains first, so the IRS rules on donating stock are to your advantage.)
If Colorado says you get an extra benefit when donating cash, but not stock, then that will apply to what you do, not what happens after. You donated stock, not cash. You have no control over what happens next, you aren't responsible if they do something bad, and you don't benefit if they do something good.
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