Stock contribution

Contributions, Faith Promises

Stock contribution

Postby gloaming » Thu Nov 09, 2017 3:53 pm

Please bear with me--I'm still new to this!

We had someone make a rather large stock donation last month. The stock was immediately liquidated, and the cash proceeds were deposited into our checking account. I entered the proceeds into PC under the correct envelope (which debited our checking account) and all seemed well...until our monthly statement arrived from Raymond James. It shows the receipt of stock, the withdrawal, and a small fee. How do I record all this?

Thank you!
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Re: Stock contribution

Postby NeilZ » Fri Nov 10, 2017 7:02 am

gloaming wrote:Please bear with me--I'm still new to this!

We had someone make a rather large stock donation last month. The stock was immediately liquidated, and the cash proceeds were deposited into our checking account. I entered the proceeds into PC under the correct envelope (which debited our checking account) and all seemed well...until our monthly statement arrived from Raymond James. It shows the receipt of stock, the withdrawal, and a small fee. How do I record all this?

Thank you!


FWIW .. its never a good idea to enter such a donation through Contributions. The reason is that the IRS requires you to list the value of the stock on the day it was transferred.

This post along with the included link can help you with this.

viewtopic.php?f=4&t=7049&p=24709&hilit=stock#p24711

The following post talks about creating a 'stock transfer' contribution setup, but if you send a written acknowledgement/receipt as described, and add the required IRS statement about the donor receiving only non-tangible religious benefits this will suffice. All you need to do is show the income as miscellaneous.

However, if this was in fulfillment of a pledge, you will need to update the pledge by going into Maintain Pledges and add that amount to the 'pledge start balance', and show the income under tithes & offerings.

Neil Zampella

Using PC+ since 1999.
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Re: Stock contribution

Postby Carol D » Wed Sep 26, 2018 9:44 am

A Church member donated stock recently to our church. They transferred the stocks directly to our church account. This is what transpired.

9/6 120 shares transferred in value 6270.00
9/7 120 shares sold @52.47 value 6296.40 settled on 9/11
9/11 check issued for 6164.81 to the church

When the check was received it was recorded under the church member’s envelope number in this way:
5000.00 contributed to Music Ministry
1164.81 contributed to Current Expense

The church member has informed me that his CPA is telling him he can show the value of 6296.40 for his tax reporting purposes but since it is such a small difference has said it is okay to use the transfer in 6270.00 amount.

From what I have already read I assume this way of recording is incorrect and I don’t have the full value of 6296.40 recorded for this church member or the 6270 value when transferred in. This value seems different depending on whom you ask. I don’t have either of those values I have the 6164.81 recorded because that was the final check amount. Please help……

1. I assumed when I received the statement from the stock account I would be recording this transfer in as part of the change in value amount when I reconciled the statement. Probably wrong, how should that be recorded so that the statement can be reconciled, do I need some other type of transaction in power church to show this transfer in of stock?

2. I assume I would enter the check from the stock account to the church as a disbursement the same as the checks we receive when we have sold stock in the past and I can reconcile that.

3. It seems I should have set up a non-cash type contribution fund for Stock Donations and entered the 6270 value there under this member’s envelope number and that would show on their yearend giving statement but this comes into question when their CPA is telling them to use the sale amount for tax purposes. Since the church member has given me the go ahead to use the 6270 value is this non-cash stock contribution the only think I need to do?

4. The only entries in Power Church so far are the contribution entries of 5,000 and 1164.81 under the member’s envelope number that I have already entered and posted. I think I need to back out these contributions for the church member and enter them under the church envelope number, is that correct. How best would I do that?

Thanks for any help and guidance you can give me.
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Re: Stock contribution

Postby NeilZ » Wed Sep 26, 2018 10:40 am

I would look at the link I included in my answer to the original post, that basically gives the correct way to enter this. However, this answer from 2006 from Matt still holds true:

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".


Basically, you give the donor what they estimate the price of the stock was when it was given. If you're going to create a Contribution fund to account for this, it SHOULD NOT be linked to any Fund Account, as the number entered will not be the amount of the funds the church will see.

This is why I always advise for any type of non-cash donation, rather than have something on a contribution statement, create a letter on church letterhead acknowledging the donation using the amount that the donor said. I use this for donations of equipment, stocks, etc.

I would also advise reading what the IRS requires for stocks and bonds in this IRS publication:
https://www.irs.gov/pub/irs-pdf/p561.pdf

Neil Zampella

Using PC+ since 1999.
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