Donating appreciated stock to charity

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communipaw
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Donating appreciated stock to charity

Post by communipaw » Fri Mar 21, 2014 8:40 pm

I have several DRIPs that I've accumulated over the years and which I'd like to donate to a charity. Do you just somehow sign over a DRIP to the charity or do you have to figure out the cost basis and do something more?

And can you donate a fully matured US savings bond, E or EE, that has stopped accruing interest? Does the IRS recognize the face value of the bond plus its interest as the amount of the charitable donation?

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dm200
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Re: Donating appreciated stock to charity

Post by dm200 » Fri Mar 21, 2014 8:48 pm

communipaw wrote:I have several DRIPs that I've accumulated over the years and which I'd like to donate to a charity. Do you just somehow sign over a DRIP to the charity or do you have to figure out the cost basis and do something more?

And can you donate a fully matured US savings bond, E or EE, that has stopped accruing interest? Does the IRS recognize the face value of the bond plus its interest as the amount of the charitable donation?


It has been a few years - but I am pretty sure you do not need to do all the cost basis calculations. If you intend to donate all of these to one charity that is capable of receiving such donations, then I would deal with that charity.

However, if you intend to make multiple such donations OR if any of these organizations are not set up to handle them, then I would open a donor advised fund (we use Fidelity) and donate the DRIPs to the donor advised fund - then parcel out the money from the DAF.

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grabiner
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Re: Donating appreciated stock to charity

Post by grabiner » Sun Mar 23, 2014 11:22 am

The IRS Form 8283 Instructions say that you do not need to include the cost basis if you donate publicly traded securities, but you do need to keep records of the basis (which might be needed in a few obscure tax situations).
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Retread
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Re: Donating appreciated stock to charity

Post by Retread » Sun Mar 23, 2014 11:49 am

communipaw wrote:And can you donate a fully matured US savings bond, E or EE, that has stopped accruing interest? Does the IRS recognize the face value of the bond plus its interest as the amount of the charitable donation?

Yes, the value of the EE Bond donation is the total redemption value of the bond. HOWEVER, you must report the accrued interest on the bond on your tax return.
Bruce.
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grabiner
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Re: Donating appreciated stock to charity

Post by grabiner » Sun Mar 23, 2014 12:00 pm

Retread wrote:
communipaw wrote:And can you donate a fully matured US savings bond, E or EE, that has stopped accruing interest? Does the IRS recognize the face value of the bond plus its interest as the amount of the charitable donation?

Yes, the value of the EE Bond donation is the total redemption value of the bond. HOWEVER, you must report the accrued interest on the bond on your tax return.


Therefore, you don't get a tax benefit compared to cashing in the bond and donating the cash. In contrast, you do get a tax benefit with appreciated stock (as long as you have held it for more than 12 months), as the charity gets the full value of the stock while you pay no tax on the capital gain.
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Re: Donating appreciated stock to charity

Post by sport » Sun Mar 23, 2014 4:32 pm

communipaw wrote:And can you donate a fully matured US savings bond, E or EE, that has stopped accruing interest? Does the IRS recognize the face value of the bond plus its interest as the amount of the charitable donation?

If you have an E, EE, or I savings bond that reaches final maturity, federal income taxes are due in the year of final maturity, whether or not you cash it in. AFAIK, savings bonds are not transferable. Therefore, I believe that you cannot sell them or donate them.
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Re: Donating appreciated stock to charity

Post by stan1 » Sun Mar 23, 2014 4:45 pm

It might be easier to create a donor advised fund if you wish the contributions to go to multiple charities.

communipaw
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Re: Donating appreciated stock to charity

Post by communipaw » Mon Mar 24, 2014 10:08 am

I'm sorry to hear that donating bonds is impractical; glad to hear that it isn't too hard to donate appreciated stock in a DRIP. Thanks to all for your responses.

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