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Author: Wradical 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 124948  
Subject: Re: Transferring stocks to a charity after ex di Date: 1/4/2014 11:52 PM
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Well, Schwab claims the record date is what counts for transfers. I think we can assume that this much is correct.

I still wonder however if the dividend stands as accrued to the shares on the X date, so that the dividend, too, is deductible.

This is not a lot of money at stake here, so it's not worth consulting a tax attorney. What kind of professional would one contact about this? Call an IRS help line?

OK, this makes more sense now that I think about it again.

We've been distracted by the contribution being right after the ex-div date, forgetting that the ex-div date is relevant only for sales and purchases. To get the dividend, you have to be the owner of record on the record date. If you're buying shares, that means the shares have to be put in your account by the record date. And that happens on the settlement date, not the trade date.

Likewise, if you SELL (as opposed to donate) the shares after the ex-div date, the shares are still in your account on the record date, because the settlement date hasn't occurred yet. So you will get the dividend.

But if you're donating the shares (or making a gift to anyone else) the ex-div. date doesn't matter, because you're not buying or selling. Whether you, or the done, is the owner on the record is a function of how fast the broker moves the securities.

Remember, the ex-div. date is merely derived by the lag between the trade date and the settlement date. The company specifies the record date, and the stock exchange takes it from there.

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