The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: specific identifcation and charity||Date: 9/18/1998 8:31 PM|
|Author: TMFTaxes||Number: 5393 of 122099|
[[I have a stock in the ESPP account. It was purchased in 95-96, so it is a long term holding,
purchased over time with the same dollar amount every month. I have all records of all purchases
(also involves partial shares). To get access to the shares I had to get a cerificate for all of them. I
also have charity commitment and enough cash to fulfill it. But I wanted to donate appreciated stock
described above and then use cash to replace donated shares, to bump up my cost basis. How do I
identify for tax purposes the shares I give to charity (incidently, FIFO rule will identify the lowest
price shares, which is what would be the best to donate).]]
The very BEST way, IMHO, is to take your one certificate and break it up into two certificates, and donate the appropriate certificate, using the FIFO method of tracking your basis.
As you note, you have good records. That is a must.
You also state that you were FORCED to take only one certificate for ALL of your shares. This really isn't a problem, but you really want to split it up.
For example, lets say that you currently have a certificate for 500 shares. You want to make a contribution of 50 shares. You simply contact the company (investor relations) and tell them of your desire. They may be able to do it at the company level, or you may have to go directly to the company transfer agent. Regardless, it can certainly be don.
Once you receive the 2 new certificates (one for 50 shares, the other for 450 shares), you sign over the 50 share certificate to the charity, noting in your records that that certificate represents the first 50 shares that you originally purchased (for FIFO and long term holding period issues), and you can then take the remaining 450 share certificate and put it into your safe deposit box or into your brokerage account.
That will secure the fact that the most appreciated shares will be the ones that you contribute to your charity.
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