Do you know why I have to include the cost basis of a stock donation to a charity? I'm entitled to the fair market value on the day of the donation, so why the question?

[hanlon-pam]

Why am I asked for the cost basis of a stock donated to a charity and held for over a year when using the turbo tax program?  I'm entitled to the fair market value on the day I donate it.  What do I put in the box to assure I get the FMV I'm entitled to? 

[TomK]

If you've held the stock for more at least one year, you are correct, and you will be able to deduct the Fair Market Value of the donation.

However, if you have held the stock for less than one year, it is short term capital gains property, and you can only claim your basis as a deduction.

As long as you've held the property for one year, the amount that you enter for the basis will not affect your deduction.

For more information - Publication 526 (2017), Charitable Contributions: https://www.irs.gov/publications/p526

[jw_dw]

I have held it for 15 years but turbo tax is decreasing my reduction because of the capitol gains. Is this new?

[DBergie]

I AM SEEING THIS OCCUR AS WELL. ONCE I ENTER THE COST BASIS, MY REFUND AMOUNT DECREASES.

I CANNOT FIGURE OUT WHY THIS IS HAPPENING. IF I ENTER THE DONATED VALUE AS THE COST BASIS THE REFUND AMOUNT DOES NOT CHANGE. SEEMS TO BE REDUCING THE AMOUNT OF MY DEDUCTION:(

[VictoriaD75]

It is possible that by increasing your deductions, you are decreasing income and no longer receiving credits such as the Earned Income Credit. You may want to preview your 1040 to see what amounts are changing after adding the deduction. You may want to consider whether or not to take the deduction.

From the menu on the left, click on Tax Tools. Choose Tools. Click on View Tax Summary. Again from the left, click on Preview my 1040. Scroll through the document to see what changes. Pay attention to the deduction amount on line 9 or credits on line 18.

[DBergie]

I am retired, no credits. It shows the full deduction on Schedule A. My guess is it may have something to do with the donation changing me from the standard deduction to itemized deductions but this does still not explain why it calculates one refund amount when I enter the donated value and then reduces the refund amount when I enter a cost basis other than the donated value.

It is all long term CG so the cost basis should have no impact on the refund amount, yet it does????

[Dave411]

I have the same problem - except that TurboTax desktop will not let me proceed without entering a value into the Cost basis.  I donated some shares of an ETF that I've bought over many years at various prices, so getting a cost basis is VERY complex ... why is TurboTax requiring me to enter this even though owned >1 year?

[Cynthiad66]

Yes, you will need to enter this information for TurboTax processing.  Since your stocks were more than 1 year old, I suggest using a date that you will use in searching the historical cost for the stocks.  You can estimate the date as long as it is more than 1 year.  You can use the steps below to determine a cost basis.  Your basis should not reduce the actual donation amount so determine your basis as close as possible.

Sources to look up historical stock prices

Internet Sources for Historical Market & Stock Data

1. Yahoo! Finance - Historical Prices. ...
2. Dow Jones Industrial Averages. Historical and current performance data. ...
3. S&P Indices. Historical performance data.
4. IPL Newspaper Collection. ...
5. Securities Industry and Financial Markets Association

@Dave411