Noncash donations

[bhart0308]

I donated appreciated stock to a charity in 2024 and am completing the info in TT.  It is asking for my cost basis.  I inherited this stock in 2014, so this should not be necessary (as it is long term).  According to the IRS guidelines, it states NOT to complete the cost basis for publicly traded securities.  The following is from the IRS form/instructions:

'For items over $500, enter your cost or adjusted basis. Do not complete this column for publicly traded securities held more than 12 months, unless you elect to limit your deduction cost basis. See section 170(b)(1)(C)(iii). Keep records on cost or other basis.'

TT will not allow this field to be empty, so I would appreciate some direction.  Also, as I was trying to find current info regarding the above question, I see that I may not be able to e-file as the donation is over $5000.  Is that correct?  If I cannot e-file my Federal return, will I still be able to e-file my state one (CA)?  Thank you.

[Opus 17]

Turbotax will not e-file a tax return that includes form 8283 if there is a signature requirement (the charity must sign the form acknowledging receipt of non-cash donations over $5000).  And you can't e-file the state return unless you also e-file the federal return.

I can't tell you why the program is asking for cost basis, but it may have something to do with the optional method mentioned by the IRS (if there are optional methods, Turbotax will usually look at both to make sure which one is best for you, even if you already know which is best).  Just enter the value (cost x number of shares) as of the date the previous owner died.  You can look that up online. 

[bhart0308]

Thanks for the reply.  Do you have any idea why TT has me show this as "Items donated" instead of "stock donated"?   Under the "items", it does have publicly traded securities, but these strange way of showing this (because it was inherited) seems like a "work around" to me?  What am I missing?  Thanks. 

[Opus 17]

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@bhart0308 wrote:

Thanks for the reply.  Do you have any idea why TT has me show this as "Items donated" instead of "stock donated"?   Under the "items", it does have publicly traded securities, but these strange way of showing this (because it was inherited) seems like a "work around" to me?  What am I missing?  Thanks. 

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I don't know. At the very beginning of the charity interview, you can choose "items", "money", "stock" or "mileage and travel expenses."  In terms of the IRS documentation, both money and mileage are reported as money on schedule A line 11, while everything else is reported on schedule A line 12 (with form 8283 if the total on line 13 is more than $500).  So the naming in the program probably has to do with what goes on line 13. 

[bhart0308]

I understand that at the beginning of the charity interview, you can select "items", "money", "stock" or "mileage and travel expenses."  Originally, I selected "stock" but then when I needed to indicate that I inherited the stock instead of purchasing, TT told me to enter the donation as "items".  Once you go through that part of the interview, under item you can select "publicly traded securities".  Any idea WHY the difference between inherited stock and purchased stock, if the end result is the same?  Thanks.

[DianeW777]

Yes, the reason is holding period and it can make a difference on your charitable donation deduction depending on other contributions. TurboTax will calculate the appropriate donation if you answer the questions.

Capital gain property exception. (applies to inherited property)

A 30% limit applies to noncash contributions of capital gain property if you figure your deduction using FMV without reduction for appreciation. See Certain capital gain property contributions to 50% limit organizations, later, under Limits based on 30% of AGI, for more information.

• IRS Publication 526 (for more details)

@bhart0308