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Author: UUinMN Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121150  
Subject: Re: Value of Charitable Gift of Stock Date: 7/14/1999 9:45 AM
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Warning: long, rambling post ahead!

Hi, Danny. Here's my non-professional, but experienced take on your questions.

The official IRS policy is that you average the high and low prices on the day the stock disappears from your account. On the other hand, the first time I gave stock to a charity, I listed method of valuation as "NYSE close", and I haven't heard anything about it. Maybe the shoe will drop, eventually.

I have some sympathy for the charity in the little tale you relate in your P.S. I chair the Finance Committee of my church, and we occasionally are given stock. We try to get the word out that people who do this should let us know when they do it, so we can sell the stock immediately. (We're not into investing, not yet. I am working to get an endowment fund set up, but that's another story...) But we've had the experience of finding out that someone gave us stock by seeing it show up on a brokerage statement. In an organization run mostly by volunteers, we're not always on top of everything as it happens, and it might indeed take us a while to "get around to selling it", since no one calls the broker every day. Would we expect the donor to make up any difference? Hmmm... Good question. The donor would certainly get a tax deduction for value at the time of the donation, but if the delay had been from their failure to communicate with us, I think I would ask them to consider making up the difference. This is a fairly small church, and I know the people, or most of them. Does that make a difference? I don't want to come on too strong.

Our church, and every other 501(c)3 organization, stands to benefit from donations of appreciated stock, but it can also introduce difficulties. One year at pledge time I had to ask one of our largest donors if he was still planning on paying his pledge from the previous year. (Fifty weeks into the fiscal year, and he'd paid nothing.) He replied that he was indeed going to give us some stock, but the time wasn't right yet. He was sure it was going to go up substantially in, oh, just a little while. I pointed out that our expenses continued, and we had a budget, and we were counting on getting the income during the fiscal year. He got patronizing. Why would I want the stock now, when it would be worth much more very soon? It was an illuminating experience, but not of the sort that I really go to church for.

Michael
Who sees it from both sides
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