Problem with Stock Donation Contribution to Charity

[tfniehaus]

@lizcoley Thanks for providing an answer! (not sure why TurboTax couldn’t clarify)  
Also wish my broker had known this!

[Kotch]

I am having the same problem on 2/19/2021.

[Kotch]

Agreed, but the program is still not working as of 2/19/2021. I entered a date of 2010, so long term. When I enter the value on the day of donation it shows above as a big refund. As soon as I enter the cost basis it drops the refund to a few hundred dollars on a contribution of over $100K. The cost basis should not affect the calculation at all if over 1 year.

[lizcoley]

Turbotax is correctly implementing the tax code, but it is very confusing if you didn't know that for the purposes of your itemized charitable deductions for transferred stock, long term positions are valued at current price x shares on date of donation and short term positions are valued at their original cost basis (even if they've had a significant gain).

[lizcoley]

Oh! That's weird. I had no problems like that with my entries this year. It all seemed to calculate appropriately. Check for a typo or a date entered in the wrong field?

[SSR3]

Turbo Tax is using the cost basis of stock donated instead of the value of the stock on the donation date.  How do I get this corrected?  I noticed that users commented on this problem last year also.

[SSR3]

I found my own answer.  If I held the stock for under 1 year, only the cost basis is deductible.  Ugh!!

[DaveF1006]

It depends on how long you have own the stock. According to this link from Super Awesome Turbo Tax Agent IsabellaG, "If you've held the stock for more than one year, you can use the Fair Market Value of the stock. 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." See page 11 of this IRS link.  As long as you've held the property for one year, the amount that you enter for the basis will not affect your deduction."

[szlerner]

This is a bit different from some of the questions up until now.  What do I do with "uncovered stock" (e.g. stock that is so old that the broker does not always know or report a basis)?

Thanks!

[golfcrackerjack]

Good question. 

If you know the # of shares and when purchased, you can go back and find out the closing price that day and multiply for the basis.  This may not get you an exact basis, but it'll be close.
The truth is that the IRS really doesn't or can't care what this figure is, only that the relevant equities were purchased far enough in the past to qualify for this treatment (as well as what its value was when it was donated, of course).

What's unfortunate is that some charities don't make it clear that there is a holding period... thus some folks donate appreciated stock that they haven't held long and lose the advantage of this provision of the tax law.

[Milesholsworth]

I seem to have the same problem with the 2021 version that existed before.  When I give both the market value and the basis, the basis is what loads as the deduction and not the market value.

[lizcoley]

Check your holding time--a stock held less than a year is treated differently from a stock held longer than a year. A short term hold is eligible as a charitable deduction at the basis value, not the market value when donated. A long term hold is valued at the market value when donated. I wish I had known this when donating a portfolio of mixed short and long term.

[Kevin636]

I have had the same problem for years with TT when donating appreciated mutual funds. I am using the fair market value of the donation at the time of the donation. They have all been held for many years (not less than 1 year) but TT always reverts the value of the donation to the cost basis as soon as that is entered. The only way I can get around it is to change the cost basis to the current value on the date of donation. 

I am not sure but wonder if it might have something to do with the option the IRS gives that we can deduct 50% of the value of the basis of the donated stock instead of 30% of the FMV at the time of the donation.

[Frank103]

I had a few non cash entries that generated a form 8283.  In addition, I had 2 stock donations.  They were the same security but the donations were made on different days.  The cost basis was the same for both. When I the 1st one it was fine .   One I entered the second one, It took the cost basis and made it the fair value of the donation on the form 8283.  Is this is a bug? 

[Frank103]

Try entering 2 donations of the same stock, different dates of donation but same cost basis per share on both lots.  That generated the problem for me.