Stock donations

[HWessling]

We have a member that wants to donate stock to the church. The church will sell that stock to purchase an item for our new outreach building. Are there any federal forms that need to be filed regarding this transaction? We currently do not file any federal tax returns. I just wondered if there are certain things that I need to do before we accept and cash in this stock and after we cash it in.

Thanks!

[Matt]

There are no federal forms that the church needs to file if someone donates stock. The church just needs to provide a receipt to the donor that shows the date of the gift, the donor's name, the number of shares given, and the name of the company. However, the church should advise the donor that they will need to file form 8283 on their personal tax return if the value of the stock is more than $500.

[HWessling]

You are always so helpful!!!!!!!!!!!

Thanks!

[wms7328]

Although you didn't include this question, one item that will come up at some point is what value to you give the contributor credit for. Generally the stock is transferred on a date and it usually takes several days to sell the stock depending on your broker. The stock value will likely change during that time. We have a policy that we give the contributor credit for the closing value of the stock on the day it was transferred or the value of the stock when it was sold, whichever is greater. If we receive less than the closing value at transfer, then we just book the difference as a misc. expense.

[Matt]

According to the Church and Clergy Tax Guide the fair market value of the donated stock is determined by adding together the high and low quoted prices of the stock on the date of the gift, then dividing by two to come up with an average price, and then multipling the average price by the number of shares donated. However, the responsibility for coming up with the fair market value of the stock donation is placed on the donor, not the church. According to the Guide, the church "is not an appraiser and should never provide donors with a "value" for donated stock".

[Kristi]

?I think we did did give credit once, years ago...IF I remember correctly. Our local banker made the transactions at the bank in one afternoon: sold the stocks and deposited the amount into our account and gave us a receipt. Wasn't that the same as making a regular deposit for the contributor?
Kristi