"Method used to determine the fair market value" for charitable contributions

[fla2025]

TurboTax 2025 desktop lists "Comparative sales" on Form 8283 as the method used to determine the valuation of a charitable donation (for publicly traded securities) regardless of the method I have selected in the "interview" OR the one I've selected manually on the worksheet.  Is this just a software bug?

[SteamTrain]

@fla2025 

Yeah, I've seen that too.   I'm thinking it might be the preferred method for those, and Comparative Sales might be locked in

They changed the Interview this year for entering stock donations, and I looked at my 8283 for a number of prior years where the interview was different, and since 2019, they always said Comparative Sales.

Those prior years they had an entirely separate selection for stock donations (i.e., you didn't go into the "Items" section to enter it), and the interview (at least since 2019) didn't even ask for the valuation method.  I just entered a stock donation again in my 2021 Desktop software in a test file....the interview doesn't ask for the valuation method and the 8283 automatically uses Comparative Sales.....  Never been questioned before.....so maybe it's right.   (I guess, in a way...Comparative Sales in the stock market on the date you donated)

[fla2025]

Thanks - I'm not clear it actually makes a difference in the filing (maybe the IRS just doesn't care about the method reported for publicly traded securities), but TurboTax's own instructions suggest that "comparative sales" is the wrong choice.  If I click the question mark next to "Valuation method" in the "Step-by-Step" process, TurboTax's guidance says:

The valuation method is whatever is used to determine fair market value. For stocks, that usually the average share price.

(Of course, they mean "that is usually.")

[phstephan]

"Comparative sales" is the wrong value. It should be honor whatever value I select. I also tried to select "Average Sale Price" but the form shows "Comparative sales". How do we report this bug?

[fla2025]

I agree.  I've reported it to TurboTax Support by phone, but it still wasn't fixed in the most recent software update.  (I'm using the Windows desktop version.)

[phstephan]

I just tried going directly to the form and then overriding the value, but then when I went to print the form I was told there was an error. The error check told me that these values should not be overridden as it can prevent cross-checking that is important for an accurate return. So I am hesitant to do that. I will see if I can report the problem as well.

[MarilynG1]

TurboTax uses Average Sale Price if you indicate that the stock was inherited.  If not, Comparative Sale Price is used as per IRS regulations.  I agree this is confusing when entering your stock donation and choosing 'Average Sale Price' and seeing the default to 'Comparative Sales'. 

Key Reasons for Using Comparative Sales Prices:

• IRS Compliance: The IRS requires that stocks, bonds, and donated items be valued at their Fair Market Value (FMV) on the applicable date, which often translates to using specific, comparative selling prices rather than averages.
• Accuracy in Reporting: For non-cash charitable contributions (Form 8283), for instance, the valuation is based on what a willing buyer would pay for a similar item (comparative sales/FMV), not the average price of all items sold, to ensure precise, individualized valuation.
• Transaction-Level Detail: TurboTax has adopted stricter, transaction-level reporting on forms like Form 8949 to align with the IRS's emphasis on tracking individual, accurate transactions rather than averaged data, which is considered a more accurate representation of the taxable event.

@phstephan 

[phstephan]

My biggest concern is that I told TurboTax that I (and the receiving organization) used the average share price to determine the FMV. So why did TurboTax change what I selected? There’s also this from IRS Publication 561: “If there is an active public market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date”. Unless TurboTax is going to recalculate the FMV I don’t believe it should report a different method for determining the FMV from the one that was actually used.

i’m still not sure I understand why this would be changed and I feel this is a bug.

[RaySpiray723]

Having same issues TT changes my choices for charitable stock donations

i enter inherited and average sale price— TT seems to default to purchase and comparative sales. 
is this a problem… 

[fla2025]

I don't think it's clear whether the IRS cares about it or not; it's very possible that for public securities it just doesn't matter.  But it does seem definitely like a software bug.  The claim that "comparative sales" must be printed on the form regardless of the user's selection is inconsistent with TurboTax's own instructions and with TurboTax's use of a selection menu for the user in the first place (on which "comparative sales" is one, but only one, of the options).

I don't know how this has worked in previous years because the last time I gave stock, I wasn't using TurboTax.  It's possible it's not a new change but a longstanding bug, because (again) it's possible that this doesn't actually cause problems with the IRS and that therefore nobody has felt pressure to fix it.  But I'm just speculating.

[AmyC]

As long as you have entered the stock information on the Form 8283 and save your tax information, along with your question here, you will be fine. If your inherited is switching to a purchase, the important thing is that inherited stock is considered long term and the inheritance date proves the basis. Comparative sales will work for the stock since it is sold on the market. 

@RaySpiray723   @fla2025  as long as the entry makes sense, is accurate charitable donation $ amount and  you have the documents in case of an audit, you are fine.

[hobbes70]

@MarilynG1

I'd like to see the IRS regulations you are using to support use of Comparative Sales Price, please. 

From Pub 561 web page, comparative sales is more for property like houses/rare books/etc, where the item you are donating is not an exact match for something sold on the market, so you need to find something "comparable".   For stocks/bonds, Pub 561 *clearly* states (see below) that one should take the average of the high/low price on the day of the donation, or from the nearest date if you donated on a day the market was not open. 

TurboTax should fill in the form with what the users in this thread have correctly attempted to do (select "average price method").  Whether the stock was inherited or purchased should not impact the sale value or the methodology for determining that value.  Maybe it impacts the cost basis determination method(?).

https://www.irs.gov/publications/p561

Stocks and Bonds

The value of stocks and bonds is the FMV of a share or bond on the valuation date. See Date of contribution, earlier, under What Is Fair Market Value (FMV)?

Selling prices on valuation date.

If there is an active public market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. For example, if the highest selling price for a share was $11 and the lowest $9, the average price is $10. You get the average price by adding $11 and $9 and dividing the sum by 2.

No sales on valuation date.

If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date.

[vasto7]

This has been reported and is apparently being corrected in the software.

See post on the same topic in the link below.

Link to Post 

[sallyawalk]

Except "inherited" is NOT being recognized when TurboTax populates the 8283. I selected inherited in the TT question screen and Average Share Price for the method. The 8283 is showing that the stock was acquired by "purchase" and the method used to determine FMV is "Comparative sales". Both of these are incorrect and contradict the answers I gave to the interview questions. (Last year this was an even bigger mess for inherited stocks, but it's still very annoying that TT can't get this right.). All the comments from a few weeks ago say this is going to be fixed, but I see no evidence of that as of 3/2 (I did pick up all the updates today when I logged in).

[MonikaK1]

The issues with entries on Form 8283 and donations of stock have been reported by other users and have been elevated for investigation. It has since been confirmed as an issue by our development team.  

We are working to resolve the issue as quickly as possible, and you can sign up here for updates. 

In the alternative, as long as the dollar amounts are correct, you could also choose to continue to file.

See this TurboTax tips article for more information about Form 8283.

@fla2025 

@sallyawalk 

@vasto7