When donating stock, Form 8283 will be needed for contributions greater than $500. TurboTax will ask additional questions to complete this form.
If you are using TurboTax CD/Download, open the Charitable Organization Worksheet and use the stock donation section to answer questions.
- The We need more info may involve the treatment of the capital gain property if the items were held short term.
- Check the rules summarized in part below to make sure the details do not require any further adjustment.
- There may be an adjustment that is needed based on what type of entity is receiving the donation is a private nonoperating foundation, too.
It is important to run through the Deductions & Credits section completely and select Done with Tax Breaks so that TurboTax recalculates your deductions.
Regarding the new treatment for donations, under the Charitable Donation Cares Act section should be blank, as well, particularly when itemizing deductions.
For more information, see:
IRS: Publication 526: Charitable Contributions, page 13 beginning in column 1, Giving Property That has Increased in Value.
Ordinary Income Property (short term capital gains):
Amount of deduction. The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Generally, this rule limits the deduction to your basis in the property.
Example. You donate stock you held for 5 months to your church. The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation).
Exception. Don't reduce your charitable contribution if you include the ordinary or capital gain income in your gross income in the same year as the contribution. See Ordinary or capital gain income included in gross income under Capital Gain Property next (page 14), if you need more information.
[Edited 02/24/2021 | 1:44 PM PST]
@GeneJ
