Re: Charitable Donation

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In Reply to: Re: Charitable Donation posted by Alan Shapiro on October 16, 1999 at 16:28:12:

: Mark, I saw your post on this issue. I'm sure you're right about how the program
: would handle this, as a "sell" transaction. Wouldn't the program, however, treat
: that "sale" as subject to capital gains, if the user uses the program to calculate
: tax consequences of investments? Tax-wise, a gift of stock (long-term)
: to charity is quite different from a sale and gift of sales proceeds. No capital gains are
: recognized.

: : : Mark,

: : : I recently made a charitable donation of 24 shares of IBM. The shares were transferred out of my account (and into the account of the charity), and obviously I received no money for this transaction. How do I account for the removal of these 24 shares in Fund Manager? If I call it a redemption, I have to enter a selling price, when in fact I received $0 for the 24 shares. If I were to enter $0 as my selling price, whis would create an erroneous loss on my capital gains report, and also artificially lower the ROI on my portfolio.

: : : How should I account for this share removal? Similarly, if shares were ever added to my account at no cost to me, how would I account for this? (i.e. If my parents were to transfer me stock.)

: : : Thanks,
: : : Kenny

: : Hi Kenny,
: : You could do as you suggest, and record the sell at $0/share, but this
: : will affect your ROI calculations. Alternatively, you could treat it as
: : if you sold the shares, and then gave the proceeds to the charity. This
: : way, you could record the sell at the value you will declare as the charitable
: : contribution. It sort of depends on how you want to keep track of it...

: : Thanks,
: : Mark
: : --
: : Mark Beiley
: :
: : Fund Manager for Windows 3.1x/95/98/NT
: :
: :

Hi Alan,
Yes, you are right, that FM will shown a capital gain entry for this sell.
If you choose to enter it this way, you would have to remember to not pay
taxes on this. You may use a transaction memo. FM isn't really designed
to consider charitable contributions of stock, so it is up to the individual
on how to handle it. Either record it as a sale at the market value, and ignore
the capital gains, or record it at $0/share, and recognize your yields
will not be accurate.

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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