Welcome Guest. Register Now!  


Itemized Deductions Schedule-A


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-11-2018, 07:52 PM
Junior Member
 
Join Date: Feb 2018
Posts: 2
Tax lots for donated stock

I made a donation of stock to a charitable organization. In identifying the tax lots from my total position in the stock I made a mistake and allocated the donation to the highest cost rather than the lowest. When I contacted my brokerage firm they claimed that the IRS rules do not allow for any changes in tax lot allocation after the settlement date. I have searched the IRS site and have been unable to find anything about making changes. I have spoken to another brokerage firm and they told me that changes are possible on a one off basis. I assume this is not an uncommon mistake and there should be some allowance to correct an innocent ( STUPID!) mistake?
Any help would be appreciated
Thanks in advance



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-12-2018, 02:02 PM
Moderator
 
Join Date: Oct 2010
Posts: 4,964
Generally, you may give away appreciated stock with a low tax basis and keep other stock with a high tax basis. It all depends on the tricky tax rules for charitable gifts of property. if you donate appreciated stock that would have produced a long-term capital gain if you had sold it i.e., you have owned the stock for more than 1 year, you can deduct the full fair market value of the stock on the date of the contribution.
However, if the stock gain would have been taxed at ordinary income rates had it been sold, your charitable deduction is limited to your basis in the stock. forExample , say,You acquired stock five years ago for $2k that is now worth $10k. If you donate the stock to charity, you can deduct an amount equal to the FMV, or $10k. There is no tax due on the $8k of appreciation.
If you have a choice between donating low-basis stock held more than 1 year and high-basis stock, it makes sense to donate the low-basis stock, absent any extenuating circumstances. Note that the tax advantages of donating low-basis stock will be accentuated if tax rates increase next year as expected.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 02-12-2018, 02:24 PM
Junior Member
 
Join Date: Feb 2018
Posts: 2
Thanks for your response. My problem is I stupidly selected tax lots from my holding which had higher cost basis than others and wanted to change this. My brokerage firm claims the IRS code prevents any change in tax lot designation after the settlement date of a donation. I have been informed by the brokerage arm of a major bank that while the IRS frowns on such changes they are permissible.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Starting to sell on etsy, need lots of tax help Tabiask Miscellaneous 1 09-22-2015 04:44 AM
Deducting donated space danny For 2013 3 09-16-2013 01:56 AM
Deducting donated space danny For 2013 1 07-01-2013 04:04 PM
Bought land under LLC, split into 2 lots, can we have 2 K-1's? ghc-townesroadllc Limited Liability Company 3 06-09-2012 02:39 PM
stock as a gift abbottstownkid Miscellaneous 2 04-10-2012 11:43 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning