Message Font: Serif | Sans-Serif
No. of Recommendations: 0
[[I have charity commitments and usually I fulfill it with well appreciated stock held
for long term. But I also have some stock of a publicly traded limited
partnership, which is a tax shelter. They pay a nice distribution, which is 80%
non taxable at the time of distribution. But at the time of sale it is subject to
recapture, and at the ordinary income tax rate. So my question is this : If I
donate stock to my charity, what happens with recapture?]]

The problem is that what you originally PAID for the publicly traded partnership (PTP) may not be the same as you BASIS in the partnership. In addition, attempting to get a FMV on the partnership might pose a problem.

It also depends upon what kind of "recapture" you are talking about. If you have taken losses in prior years, you basis in the interest may be much less than you think. Remember that PTPs are generally NOT considered "qualified appreciated stock" when dealing with charitable contributions where you can get the full FMV of the shares as your charitable contribution. So you may be stuck with your BASIS in the PTS, which could be very low.

So before you go too far on this one, you'll want to make sure that you do your homework.

[[ How much grieg this
will cause to my charity ( even if it is advantageous to give them the stock, I can
not allow them to spend most of it on the accountant to fill out most of the million
forms I fill out every year for this K-1 substitute, plus more because of their tax
status).]] may be a PITA for the charity...not necessarily because of the forms but because of the future transfer issues. The the problems with this issue really fall more on your than the charity.

TMF Taxes
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.