FAQ: How do I record a transaction in my brokerage account for the transfer of stock to a charitable

Unknown

We recently transferred stock directly to a charity. How do I record this in my brokerage account? Is "Remove," or "Adjust Share Balance" appropriate? We need to keep this info for 2015 tax purposes.

q_lurker

I take a somewhat convoluted process in Quicken all within the one applicable investment account:

1. I Remove the donated shares at their cost basis. This removes the shares and generates no cap gains for me, nor cash in the account.
2. I Add the shares back into Quicken at their donated (current fair market value) - an Add Shares transaction.
3. I sell those just added shares at their donated fair market value -- again no cap gains generated but now cash in the account
4. I MiscExp (or other similar transaction) the cash to the charity categorized to my charitable contributions category.

Thus I have a record of what shares I donated when at what value and Quicken has a concept that I accrued a certain dollar donation. Others use similar but slightly different approaches. Note that the gist is to get the shares out, generate the cash, and show the donation as cash, even though that is not exactly the real-world transaction.

NotACPA

I'm missing something in your step 1.  IF you sell for cost basis, where do the cap gains come into play?  Since cap gains/loses are the calculated as Sales Price - Cost Basis.

NotACPA

Also, there shouldn't be ANY cap gains on the donation ... but you get to deduct the FMV without having to claim the CG income.

q_lurker

Typo.  Edited answer to change it from "to cap gains" to "no cap gains"

NotACPA

Thanks

Unknown

q.lurker. Thnx, but this doesn't quite work. After Step 1 I now have the original purchase cost added back into my Cash Balance. Steps 2, 3 & 4 create a wash, still leaving me with the additional non-existent money in my Cash Balance. BTW, when I used MiscExp, for some reason this didn't change my total Cash Balance, so I used Withdraw instead.

q_lurker

I take a somewhat convoluted process in Quicken all within the one applicable investment account:

1. I Remove the donated shares at their cost basis. This removes the shares and generates no cap gains for me, nor cash in the account.
2. I Add the shares back into Quicken at their donated (current fair market value) - an Add Shares transaction.
3. I sell those just added shares at their donated fair market value -- again no cap gains generated but now cash in the account
4. I MiscExp (or other similar transaction) the cash to the charity categorized to my charitable contributions category.

Thus I have a record of what shares I donated when at what value and Quicken has a concept that I accrued a certain dollar donation. Others use similar but slightly different approaches. Note that the gist is to get the shares out, generate the cash, and show the donation as cash, even though that is not exactly the real-world transaction.

My error.  The first transaction goes in as a Remove Shares, not a Sell Shares.  (Every time I write these things up from memory without double checking, I seem to get bit.)  

(Edited the above for a consolidated statement.)

Unknown

Thanks, that did it.