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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Re: Value of Charitable Gift of Stock Date: 7/14/1999 11:04 PM
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[[The official IRS policy is that you average the high and low prices on the day the
stock disappears from your account. ]]

Right...the "mean" value of the high and low. I think that we are saying the same thing...but since the question is very specific, I would like to provide a very specific answer.

The best answer is one from the IRS regulations on this very issue. Here 'tis...

<<On Feb. 1, 1998, D contributed $10,000 in cash to Charity B and 50 shares of publicly traded stock to Charity C. The amount of the contribution to Charity B is $10,000, the amount of money contributed. The amount of the contribution to Charity C is the fair market value of the publicly traded stock on the date of the contribution. 102 On Feb. 1, 1998, the highest quoted selling price for the publicly traded stock given to Charity C was $48 and the lowest quoted selling price was $46. The fair market value of the stock on the date of D's contribution was the mean between the high and low prices, or $47 per share (($48 high + $46 low)/2). The amount of the contribution to Charity C is $2,350 (50 shares x $47 fair market value per share).>>

This comes from Reg 20.2031-2. The goofy thing is that this is really an estate tax regulation. But this reg provides that if there is a market for stock, the fair market value of the stock is the mean between the highest and lowest quoted selling prices on the valuation date. Because of the fact that valuation issues for charity fall along the same lines as for the FMV for estate tax inclusion, the regulations concerning valuation for estate and gift tax purposes are often consulted for purposes of valuing charitable contributions.

Hope this clears it right up.

TMF Taxes
Roy
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