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Donating Appreciated Stock in Retirement: The Deduction, the Limits and the Gain You Skip

Josh Rendler, CFP®

Creator of Motion Retirement

Updated 2026-10-12 · Tax year 2026 · Figures checked October 10, 2026 · How this is checked

Can I donate appreciated stock to charity and get a tax deduction?

Yes. Give shares you've held more than a year, and you can usually deduct what they're worth that day. You also generally pay no tax on the gain. For a gift to a public charity (a charity like a church, school or hospital that gets the best tax treatment for gifts), the cap is 30% of your AGI (your total income minus a few set subtractions, the number many tax rules start from). Private foundations (a charity funded mostly by one person, family or company, not a public charity) have lower caps. It only lowers your tax if you itemize.

  • Shares held more than a year and given to a public charity are usually deducted at full value. You generally pay no tax on the gain.
  • The yearly cap is 30% of AGI. Anything over the cap becomes a carryforward (the part of a gift too big to deduct this year, saved for up to five later years) you can use over the next five years, under the cap each year. What's left after that is lost.
  • A gift lowers your taxable income (the part of your income that tax rates are actually charged on) if you itemize. The 2026 non-itemizer deduction (a 2026 deduction for cash gifts to charity, even if you skip itemizing) is for cash only, and not for stock at all.
  • Shares held one year or less usually count only at what you paid, or their value if lower. Shares that lost value are usually better sold first.
  • If you'd keep the shares until death, your heirs usually owe no tax on the gain anyway. At 70½ or older, giving straight from your IRA may be worth a look first.
Jump to a question

Giving shares straight to a charity lets you skip the tax you’d owe if you sold them first. You also get a deduction for the shares’ full value if you itemize. That’s for shares held more than a year and given to a public charity. A yearly cap limits how much of it you can deduct this year. See the caps below. The rest isn’t lost. Carries forward up to five years, under the same cap.123 Private foundations work differently, and their caps are lower. Generally what you paid; publicly traded stock gets full value.45 See private foundations below. The 2026 0.5% floor (a 2026 rule: the first sliver of your charity gifts, half a percent of income, is not deductible), covered below, trims that a little.

Many retirees own shares that grew for decades. It might be an old employer’s stock or a fund bought in the 1990s. If you sell those shares to give cash, you pay tax first and give what’s left.

This page covers the federal rules. At 70½ or older, you can also give straight from your IRA. That’s a qualified charitable distribution. It’s often the stronger tool if you don’t itemize. See giving from your IRA vs. giving stock.

Can I donate appreciated stock as a tax deduction?

Yes. Give stock you’ve held over a year to a public charity. You can usually deduct its value on the day you give it.

Stock held over a year and given to a public charity is generally deducted at its value that day.6 Held one year or less, the deduction is generally the lower of what you paid or its value.7 Stock worth less than you paid is deducted at its value, and the loss isn’t deductible.8 Traded stock is valued at the average of its high and low prices that day.9 If it didn’t trade that day, you average the nearest trading days before and after.10 That method applies when those trading days fall within a reasonable period of your gift.10 That average is weighted, so the trading day closer to your gift counts for more.11

The tax code calls shares you’ve held more than a year that grew in value capital gain property (an investment you held more than a year that is now worth more than you paid).

So you get two benefits at once:

  1. A deduction for the full value. Say you paid $5,000 for shares now worth $25,000. You can deduct $25,000, within the limits below.
  2. No tax on the $20,000 of growth. A gift isn’t a sale, so you have no gain to report. The charity sells the shares later. By my reading, the charity owes no income tax on it.1213

The deduction only helps if you itemize. That means listing your itemized deductions (costs like charity gifts you list one by one on your return instead of the flat amount). Your list, gift included, must be more than your standard deduction (the flat amount most people can subtract from income without listing costs). If your list doesn’t win, the only benefit left is the tax you skip on the gain.

Starting in 2026, people who don’t itemize can deduct some charity gifts. Both the asset and the charity matter here. Property (anything you own other than cash, such as stock or a fund, not just a house) such as shares is not the same as cash. And a supporting organization (a charity set up to help one or more specific public charities) or a donor-advised fund (a giving account at a charity that holds your gifts until you pick where they go) is treated differently from other public charities.

From 2026, if you don’t itemize, you can deduct up to $1,00014 of cash gifts, or $2,00014 on a joint return.14 The cash must go to a public charity, or one of a few special foundations, not a donor-advised fund or a supporting organization.1516 Gifts of stock or other property don’t count, and neither do carryovers from earlier years.15 It lowers your taxable income, but not your AGI.17

So a household that gives cash too has one more step. By my reading, your itemized list has to beat your standard deduction plus that cash deduction. Giving up the cash deduction is part of the cost of itemizing.14

Is it better to donate appreciated stock or cash?

Often stock, if you itemize and you’d sell the shares someday anyway. Both give you the same deduction for the same value. Only the stock gift also wipes out the tax on the gain.

Cash can come out ahead in a few cases:

  • You don’t itemize. Cash given straight to a public charity can count toward the 2026 non-itemizer deduction. Up to $1,000 ($2,000 joint) of cash to public charities, from 2026, if you don't itemize.14151617. Cash to a donor-advised fund or a supporting organization doesn’t count. Stock doesn’t count at all. Giving shares still skips the tax on the gain.
  • The gift is big next to your income. The yearly cap on cash is higher, so more of a big cash gift counts this year. See the caps.
  • The shares lost value. Selling first lets you use the loss. How much of it you can use in one year is limited. It helps most if you have gains to offset. See stock that has lost value.
  • You’d keep the shares until you die. Then the gain may never be taxed anyway. See give now or leave it to heirs.

Do I have to pay taxes if I donate stock to a charity?

Generally no. A gift isn’t a sale, so the gain in shares you give away is usually not yours to report.

The 3.8% net investment income tax applies to the smaller of your investment income or your income above a threshold.18 By my reading, gain on stock you give away and never sell isn’t counted.18

That 3.8% tax hits investment income for higher-income households. A sale that was already locked in before the gift is the one case where the gain could still count. See can the charity sell the shares right away.

There is one thing you give up. I cover it in give now or leave it to heirs.

How long do I have to hold the stock?

More than one year. Held one year or less, your deduction is usually smaller. It’s your cost basis (what you paid for an investment, or after-tax money put in an IRA, used to figure what part is taxed), or the shares’ value if that’s lower. The deduction rule above gives both cases.

Two details matter here:

  • Each batch of shares has its own clock. Each batch is a tax lot (one batch of shares bought on the same day at the same price). If dividends were reinvested, the newest lots may be under a year old. That can be true even if you first bought years ago.
  • Inherited shares usually count as held more than a year.

When you die, your heirs’ cost for stock generally resets to its value on the day you die.19 If they sell within a year of your death, it still counts as held more than a year.19

How much appreciated stock can I donate to charity?

You can give as much as you want. What you can deduct in one year is capped as a share of your AGI.

Cash given to public charities can be deducted up to 60% of your AGI each year.20 That 60% room is reduced by your other gifts to public charities the same year.20 That 60% cap no longer has an end date.20 Stock held over a year, given to a public charity, is capped at 30% of AGI.21 Other gifts to public charities are capped at 50% of AGI.22 That 50% is a cap on your public-charity gifts together, so cash you gave that year uses up part of it.22 Gifts to most private foundations are capped at the lesser of 30% of AGI or what’s left of the 50% room.2324 For stock held over a year, the cap is 20% of AGI. It can be lower: only what’s left of the 30% stock room.25 Stock given to a public charity is counted after your other gifts.2627 That same stock given to most private foundations is counted last of all.25

The cap is easy to reach on a retiree’s income. For a couple with $120,000 of AGI, the 30% cap is $36,000 of stock gifts that year. The 0.5% floor can trim a bit more.

Gifts lost to the 0.5% floor carry over only from a year when gifts went over a yearly AGI cap.28 Even then, only the floor amount tied to the kind of gift that went over joins the carryover.29 Otherwise, the amount lost to the floor is gone.28

What happens to the part over the 30% limit?

It isn’t lost right away. You get five more years to use it, under the cap each year.

Gifts over a yearly cap can be deducted in the next five years, but not after that.1 In those years, they generally keep the same cap.1 Within each kind of gift, new gifts are used before carryovers, and older carryovers before newer ones.3 Qualified conservation gifts get 15 years instead of five.2

The 50% choice below is the exception. Making it in a later year also recounts old carryforwards of that kind.

When a spouse dies, their share of an unused carryover can be used only on their final return.30 The surviving spouse can’t use it in later years.30

Charitable deduction carryforwards has the details.

The 50% choice: deduct what you paid, with a higher cap

You can trade the full-value deduction for a higher cap.

You can choose a 50% of AGI cap instead of 30% for stock that grew, given to public charities.31 But then you deduct what you paid, not its value.31 The choice covers all such gifts that year and their carryovers.31

This choice isn’t as strong as a full-value deduction on shares with a big gain. But it can still beat a plain cash gift. Here’s why:

  • You get the same deduction as giving cash equal to what you paid.
  • The charity gets the full value of the shares.
  • You pay no tax on the gain.
  • The 50% of AGI cap is higher than the 30% cap on a full-value stock gift. It’s a cap on your gifts to public charities together, so cash you give that year uses up part of it.22

It has a deadline. You make it on your original return, or on an amended return filed by the original due date.32

Worked example · tax year 2026The 50% choice on shares with a small gain
Assumptions
  • Hypothetical retiree who itemizes. Shares worth $12,000, bought for $10,000, held more than 1 year.
  • The gift goes to a public charity. No other charity gifts this year. Federal only.
  • No taxable income is figured here. The example only compares the deduction and the gain that is never taxed.
Write a $10,000 check Give the shares and make the 50% choice
Charity gets $10,000 $12,000
Your deduction before the 0.5% floor $10,000 $10,000 (what you paid)
Gain you never pay tax on $0 $2,000
Yearly cap 60% of AGI 50% of AGI

The deduction is the same. The charity gets $2,000 more, and that $2,000 of gain is never taxed to you.

This retiree itemizes, so the 0.5% floor also applies. It takes the same amount off either way, so the comparison doesn’t change.

The 2026 changes that affect the value

Two federal changes starting in 2026 make an itemized charity deduction worth a bit less. The first is the 0.5% floor.

From 2026, if you itemize, your gifts count only above 0.5% of your AGI.33 By my reading, the floor comes off after the yearly AGI caps.34 It comes off in a set order, starting with gifts under the 20% cap and ending with cash to public charities.35

With $200,000 of AGI, the first $1,000 of gifts gives no deduction.

The second is the 2/37 limitation (a 2026 rule that trims deductions for people in the top tax bracket).

From 2026, itemized deductions are trimmed if your income reaches the 37% bracket.36 The trim is 2/37 of the smaller of two amounts: those deductions, or your income above where that bracket starts.36 That income is counted before itemized deductions come off.37 The trim comes after every other limit, so each dollar fully hit saves about 35 cents.3736

Neither change touches the gain you skip. What changed for charitable deductions in 2026 covers both.

Worked example: giving shares instead of cash

Worked example · tax year 2026A $20,000 gift: sell and give cash, or give the shares
Assumptions
  • Hypothetical married couple filing jointly, both under 65, AGI $200,000 before any sale, already itemizing (their other itemized deductions exceed the standard deduction before any gift).
  • Other itemized deductions total $36,000. Tax is figured on the full 2026 federal return in each case, including the higher 0.5% floor that the sale's gain causes.
  • Shares worth $20,000, cost basis $4,000, held 10 years. Selling them is the alternative to giving them.
  • The 3.8% net investment income tax does not apply at this income. No other charitable gifts this year. Federal only.
  • Both are under 65, so neither gets the senior deduction. If they were 65 or older, selling would also shrink it.
Step Sell, then give cash Give the shares
Value given to charity $20,000 $20,000
Capital gain realized ($20,000 − $4,000) $16,000 $0
AGI $216,000 $200,000
Capital gains tax (15%) $2,400 $0
0.5% floor (0.5% of AGI) $1,080 $1,000
Deductible amount $18,920 $19,000
Yearly AGI limit that applies Cash limit, 60% of this column’s AGI — not reached Stock limit, 30% × $200,000 = $60,000 — not reached
Taxable income $161,080 $145,000
Federal tax, no gift and no sale ($164,000 taxable) $25,504 $25,504
Federal tax with this choice $23,742 $21,324
Net federal tax saved $1,762 $4,180

Giving the shares saves $2,418 more than selling first. The gift costs this couple $15,820 if they give shares. It costs $18,238 if they sell first.

This assumes the couple would sell this year anyway. If they’d hold the shares for many years, the skipped tax is worth less today.

Which shares should I give?

Usually the ones with the biggest gain for their value. Every lot held more than a year and worth more than you paid gives the same deduction. Only the gain you skip is different.

Lot Value What you paid Gain skipped if given
A (bought 2021) $20,000 $18,000 $2,000
B (bought 2003) $20,000 $4,000 $16,000

Giving lot B skips eight times as much gain as lot A. The deduction is the same.

If you bought shares at different times and don’t say which ones you’re giving, the oldest shares go first.38 With a broker, you pick the shares by telling the broker when you give them.38 The broker must then confirm your choice in writing within a reasonable time.38 Keep that confirmation.38 Mutual fund shares can use your average cost instead.39

Brokers have their own forms and default settings for this. It’s worth asking yours how a gift of shares records the lot.

A few points I see come up often:

  • Losing lots are the exception. See stock that has lost value below.
  • Two goals at once. When several holdings have similar gains, some retirees give the one they’d like to own less of. The tax result is the same.
  • Short-term lots hide in old holdings. Reinvested dividends make small new lots. Only lots held more than a year get the full-value deduction.
For CPAs and attorneysLot identification and average basis

Adequate identification for broker-held shares is governed by Treas. Reg. § 1.1012-1(c)(3)(i): specification to the broker at the time of the sale or transfer, plus written confirmation within a reasonable time. Absent it, § 1.1012-1(c)(1)(i) charges the transfer to the earliest lot. Shares of a regulated investment company and post-2010 DRP shares may use the average basis method under § 1.1012-1(e). Because a charitable transfer is a “transfer” under (c)(1), the same rules decide basis and holding period for the gifted lot.3839

What if I don’t know what I paid?

For shares held more than a year and given to a public charity, what you paid doesn’t change your deduction. You still need to know the shares are more than a year old. Old statements usually show the buy date.

For publicly traded shares held more than a year, you leave the cost box on Form 8283 (the tax form you add when you deduct gifts of things other than cash, like stock) blank. The one exception is if you make the 50% choice.40

Mutual funds and ETFs

The same rules apply to fund shares held more than a year. In practice:

  • ETFs move like stocks. A broker-to-broker move usually takes a few business days.
  • Mutual funds held at the fund company can be slower. Some small charities can’t take them. A donor-advised fund often can.
  • A donor-advised fund can sell the shares. The charity that runs it is tax-exempt, so the sale isn’t taxed to it or to you. By my reading, the charity owes no income tax on it.1213

What’s the most tax-efficient way to raise cash when part of it is going to charity?

Often, sell what has little gain and give what has the most gain. Shares near what you paid cost little tax to sell. Your shares with the biggest gain cost the most tax to sell. Those are the ones that do the most good as a gift.

A common order:

  1. Decide how much goes to charity this year.
  2. Give that amount from your lots with the biggest gain held over a year.
  3. Raise the rest of the cash from holdings with little gain, or from losses.

How much this is worth depends on whether you itemize, your tax rate on gains, and whether you’d ever sell the shares.

What if I have one large stock with a big gain?

Giving part of it each year is one way to shrink it without tax on the part you give. Some retirees give slices to a charity or donor-advised fund, starting with the lowest-cost lots. They sell the rest over time. The 30% cap limits how much you can deduct each year.

If you also want income back, a charitable remainder trust (a trust that pays you or people you name for life or a set term, then gives what is left to charity) is a different tool. It pays you income, and the charity gets what’s left. It is complex, and it tends to fit people who really want to give.

A charitable remainder trust pays no income tax, so it can sell what you gave without tax at that moment.41 Business-type income inside it is taxed at 100%.41 That includes part of the income from an asset with a loan on it, like a mortgaged building.42 The trust can’t be undone, and it files Form 5227 every year.43

Charitable trusts covers them.

Related video The IRS Quietly Gave You a Roth Conversion Gift—Most Retirees Miss It · Roth conversions paired with stock gifts

Should I donate stock that has lost value?

Usually selling first comes out ahead. Shares worth less than you paid are deducted at today’s value, and nobody gets the loss. If you sell first, you get to use the loss, and then you give the cash.

Capital losses first offset capital gains.44 Beyond that, you can deduct up to $3,000 a year against other income, or $1,500 if married filing separately.44 The rest carries to the next year.44

The charity gets the same amount, and you keep the loss.

Worked example · tax year 2026Donating a losing position vs. selling it first
Assumptions
  • Hypothetical shares worth $10,000 with a $14,000 cost basis.
  • The donor itemizes and has at least $4,000 of capital gains elsewhere this year that the loss can offset.
  • Assume a 15% federal rate on long-term capital gains.
  • No age or income is set, so the senior deduction is left out. The example only values the loss.
Step Donate the shares Sell, give $10,000 cash
Charitable deduction $10,000 (value, not basis) $10,000
Capital loss realized (what you paid, $14,000, − today’s value, $10,000) $0 (lost) $4,000
Tax value of the loss (offsets other gains: $4,000 × 15%) $0 $600

Selling first is worth $600 more. The charity gets the same.

Can I donate appreciated stock to a private foundation?

Yes, but the rules are less generous.

Stock that grew, given to most private foundations, is generally deducted at what you paid.4 Stock traded on a public market is the exception and counts at full value.4 Full value counts only up to 10% of that company’s stock.4 Your earlier gifts and your family’s gifts count toward that 10%.5

The cap is lower too, as the caps above show. Some private foundations, such as operating foundations, follow the public charity rules. The foundation’s lawyer can confirm which kind it is.

How is the stock valued, and what is the date of the gift?

For stock traded on an exchange, the value is the average of the day’s high and low price on the gift date. It isn’t the closing price. If there were no trades that day, such as a weekend or holiday, the value is a weighted average. It blends the high-low averages on the nearest trading day before and the nearest trading day after. The day that is closer counts more. This works as long as there were trades within a reasonable time on both sides.45

Mutual fund shares work differently. There is no high and low price to average. The value is the fund’s redemption price for the gift date. That’s the price the fund pays to buy a share back.46 If the fund quoted no price that day, you use the last price quoted before it.46

The gift date is when the gift is complete.

A gift is deducted in the year you pay it.47 A mailed check counts on the day you mail it, if it clears.4849 A gift on a credit card counts in the year you make the charge.48 A stock certificate you sign over counts the day you deliver or mail it to the charity.5049 Stock sent through your own broker or the company counts only when it is moved into the charity’s name.50

For electronic moves, people usually use the day the shares land in the charity’s account. Shares that land on January 2 count for the next year. So it helps to start December gifts early. Brokers and charities set their own cutoffs, so it’s worth asking yours.

What are the IRS rules for donating stock?

Three paperwork rules apply. The first is a receipt from the charity.

A gift of $25051 or more needs a written receipt from the charity.52 It must give the cash amount, or describe any property, and say whether you got anything back.5253 If you did, it must describe it and estimate its value.52 You must have it by the day you file, or your return’s due date plus any extension you got, whichever comes first.5453

For stock, that receipt describes the shares.

The second is Form 8283.

If your deduction for non-cash gifts tops $50040 for the year, you attach Form 8283.55 Stock traded on a public market goes in Section A, at any amount.40 Say your deduction for other property is more than $5,00040.56 Then you generally need a qualified appraisal, and the gift goes in Section B.5640 For stock that isn’t publicly traded, the appraisal starts above $10,000, though Section B still applies.57 For the $5,00040 amount, similar items you gave count as one gift.58

The third is your own cost records. A gift isn’t a sale, so it won’t show up on your broker’s year-end sales form.

Should I give stock now or let my heirs inherit it?

It depends on whether you’d ever sell the shares.

Here is the trade-off in plain terms. If you keep the shares until you die, your heirs usually owe no tax on the gain. That’s the step-up in basis (the rule that usually resets an inherited investment's cost to its value at death; IRAs don't get it). Cost generally resets to the value on the day you die.19

So if you’d hold the shares for life, giving them away doesn’t save gain tax. Nobody would have paid it. What a gift still gives you is the deduction, if you itemize.

  • If you’ll sell during your life, giving the low-cost shares gets the deduction and skips a tax you’d pay.
  • If you’ll hold them until death no matter what, the skipped gain is worth little. A pre-tax IRA may be the better thing to give. No step-up; heirs pay ordinary income tax as they take it out.6061

That’s the case for giving from the IRA during life, or naming a charity on your IRA. The stock then goes to heirs.

How do I donate stock?

It takes six steps:

  1. Ask the charity if it takes stock. Get its broker details and a contact. Many large charities post these.
  2. Pick the lots. Lots held over a year with the biggest gain skip the most tax.
  3. Send your broker written instructions naming the lots. Keep the broker’s written confirmation.
  4. Tell the charity what’s coming and from whom. Shares often arrive without your name.
  5. Get the charity receipt (the written receipt a charity gives you for a large gift, needed before you file). Save the confirmation that shows the date.
  6. At tax time, find the value. Fill in Schedule A, plus Form 8283 Section A if your deduction tops $50040.

Giving to several charities? A donor-advised fund can take one transfer and send grants over time. That pairs well with giving several years of gifts at once.

Can the charity sell the shares right after I give them?

Yes, as long as it isn’t required to. Most charities sell donated shares soon after. That’s fine.

The charity can sell the shares after you give them.62 There is a clear test for one case.62 It comes from an IRS ruling about a company buying back donated shares.62 There, the gain is yours only if the charity is bound, or can be forced, to give up the shares.62 A charity that is only expected to sell is not enough.62 By my reading, that ruling is about a buyback, not a sale to an outside buyer.62 So a sale already agreed before the gift is the real risk.62

By my reading, that test doesn’t settle every sale. If a sale is already in motion, the gain may still be treated as yours. A signed merger deal or a tender offer are the usual examples. A gift made before a deal is announced carries the least risk.

That’s why many donors give the shares first and leave the decision to sell with the charity.

For CPAs and attorneysPrearranged sales and assignment of income

In Rev. Rul. 78-197, the IRS announced it would follow the result in Palmer v. Commissioner, 62 T.C. 684 (1974), on similar facts. It treats redemption proceeds as the donor’s income only if the donee is legally bound, or can be compelled, to surrender the shares. Some courts weigh other factors, so a signed sale deal before the gift is the main risk.62

Common mistakes

  • Selling first and giving cash. That turns an untaxed gain into a taxed one.
  • Locking in the sale before the gift. If the charity is bound to sell, the IRS can tax you on the gain.
  • Giving short-term lots. Reinvested dividends hide them inside old holdings.
  • Giving away a loss. Sell those shares first instead.
  • Not naming the lots. The law then uses your oldest lot, which may not be the one you meant.
  • Forgetting the 30% cap. A big gift in a low-income year may take years to deduct.
  • Counting on a deduction without itemizing. The 2026 non-itemizer deduction doesn’t cover stock.
  • Using the closing price for exchange-traded shares. Use the high-low average on the gift date.
  • Treating a private foundation like a public charity. The caps are lower.

Sources (62)

Show

  1. Contributions above the AGI limits carry over for up to 5 years (15 for qualified conservation contributions) and generally keep the same percentage limit in the carryover year.

    • IRS Publication 526 (2025), Carryoversyou may be able to deduct the excess in each of the next 5 years until it is used up, but not beyond that time. Checked 2026-10-09.
    • IRS Publication 526 (2025), CarryoversGenerally, contributions you carry over are subject to the same percentage limits in the year to which they are carried as they were in the year of the contribution. Checked 2026-10-09.

  2. Qualified conservation contributions over their AGI limit carry over for 15 succeeding years, not 5.

    • 26 U.S.C. § 170(b)(1)(E)(ii), § 170(b)(1)(E)(ii)such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding years in order of time. Checked 2026-10-10.

  3. Within each category, current-year contributions are deducted before carryovers, and older carryovers are used before newer ones.

    • IRS Publication 526 (2025), CarryoversFor each category of contributions, you deduct carryover contributions only after deducting all allowable contributions in that category for the current year. If you have carryovers from 2 or more prior years, use the carryover from the earlier year first. Checked 2026-10-09.

  4. Capital gain property given to most private (nonoperating) foundations is deductible only at basis, except 'qualified appreciated stock' (publicly traded stock that is capital gain property, subject to a 10% ownership limit), which keeps a fair-market-value deduction. Capital gain property gifts to these organizations are limited to 20% of AGI (or, if less, 30% of AGI minus 30%-category capital gain gifts).

    • 26 U.S.C. § 170 (LII), § 170(e)(1)(B)(ii)(ii) to or for the use of a private foundation (as defined in section 509(a) ), other than a private foundation described in subsection (b)(1)(F), Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(A)Subparagraph (B)(ii) of paragraph (1) shall not apply to any contribution of qualified appreciated stock . Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(B)for which (as of the date of the contribution) market quotations are readily available on an established securities market, and (ii) which is capital gain property Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(C)Donor may not contribute more than 10 percent of stock of corporation Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(D)(i)(I) 20 percent of the taxpayer’s contribution base for the taxable year, or (II) the excess of 30 percent of the taxpayer’s contribution base for the taxable year over the amount of the contributions of capital gain property to which subparagraph (C) applies. Checked 2026-10-09.
    • IRS Publication 526 (2025), Capital Gain Property, ExceptionsThe property (other than qualified appreciated stock) is contributed to certain private nonoperating foundations; Checked 2026-10-09.

  5. The 10 percent limit on qualified appreciated stock is cumulative and aggregated: stock is not qualified appreciated stock to the extent the amount contributed, increased by the aggregate amount of all prior such contributions by the donor of stock in that corporation, exceeds 10 percent in value of all of the corporation's outstanding stock; and the donor is treated as making all contributions made by any member of the donor's family.

    • 26 U.S.C. § 170 (LII), § 170(e)(5)(C)(i)In the case of any donor, the term “qualified appreciated stock” shall not include any stock of a corporation contributed by the donor in a contribution to which paragraph (1)(B)(ii) applies (determined without regard to this paragraph) to the extent that the amount of the stock so contributed (when increased by the aggregate amount of all prior such contributions by the donor of stock in such corporation) exceeds 10 percent (in value) of all of the outstanding stock of such corporation. Checked 2026-10-11.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(C)(ii)For purposes of clause (i), an individual shall be treated as making all contributions made by any member of his family (as defined in section 267(c)(4)). Checked 2026-10-11.

  6. Capital gain property is a capital asset that would have produced long-term capital gain if sold at fair market value on the date of the gift; for stock this generally means held more than 1 year.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(iv)the term “ capital gain property ” means, with respect to any contribution, any capital asset the sale of which at its fair market value at the time of the contribution would have resulted in gain which would have been long-term capital gain. Checked 2026-10-09.
    • IRS Publication 526 (2025), Capital Gain PropertyCapital gain property includes capital assets held more than 1 year. Checked 2026-10-09.

  7. For property held 1 year or less, the deduction is reduced by the gain that would not have been long-term, so the deduction is generally the lower of basis or fair market value.

    • 26 U.S.C. § 170 (LII), § 170(e)(1)(A)the amount of gain which would not have been long-term capital gain (determined without regard to section 1221(b)(3) ) if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution) Checked 2026-10-09.
    • IRS Publication 526 (2025), Ordinary Income Propertycapital assets (defined later, under Capital Gain Property ) held 1 year or less. Checked 2026-10-09.

  8. If donated property is worth less than its basis, the deduction is limited to fair market value and the loss is not deductible.

    • IRS Publication 526 (2025), Giving Property That Has Decreased in ValueIf you contribute property with an FMV that is less than your basis in it, your deduction is limited to its FMV. You can’t claim a deduction for the difference between the property’s basis and its FMV. Checked 2026-10-09.

  9. Publicly traded stock is valued at the average (mean) of the highest and lowest quoted selling prices on the valuation date (date of the gift).

    • IRS Publication 561 (Rev. 12/2025), Stocks and Bonds, Selling prices on valuation datethe FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. Checked 2026-10-09.
    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)the mean between the highest and lowest quoted selling prices on the valuation date is the fair market value per share or bond. Checked 2026-10-09.

  10. If there were no sales of the security on the valuation date but there were sales within a reasonable period both before and after it, fair market value is a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date.

    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)If there were no sales on the valuation date but there were sales on dates within a reasonable period both before and after the valuation date, the fair market value is determined by taking a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date. Checked 2026-10-12.

  11. When there were no sales on the valuation date, the average of the means on the nearest trading date before and the nearest trading date after is weighted inversely by the number of trading days between each selling date and the valuation date, so the nearer trading date carries more weight.

    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)The average is to be weighted inversely by the respective numbers of trading days between the selling dates and the valuation date. Checked 2026-10-12.

  12. A § 501(c)(3) charity is exempt from federal income tax, so a charity that receives an IRA as beneficiary owes no income tax on the distribution (inference: IRA proceeds are not unrelated business income).

    • 26 U.S.C. § 501 (LII), § 501(a)An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503. Checked 2026-10-09.

  13. An organization described in § 501(c) (including a § 501(c)(3) charity) is exempt from federal income tax, so a charity that receives pre-tax IRA dollars generally pays no income tax on them.

    • 26 U.S.C. § 501 (LII), § 501(a)An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503. Checked 2026-10-09.

  14. Beginning in 2026, taxpayers who do not itemize may deduct up to $1,000 ($2,000 joint) of cash gifts to § 170(b)(1)(A) public charities, excluding gifts to supporting organizations and donor-advised funds.

    • 26 U.S.C. § 170 (LII), § 170(p)the deduction under this section shall be equal to the deduction, not in excess of 1,000 ($2,000 in the case of a joint return) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Amendment note, P.L. 119-21 § 70424(a)substituted “$1,000 ($2,000” for “$300 ($600” Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Effective date note, P.L. 119-21 § 70424(b)shall apply to taxable years beginning after December 31, 2025 . Checked 2026-10-09.

  15. The non-itemizer deduction counts only cash contributions made during the year to § 170(b)(1)(A) organizations, not to § 509(a)(3) supporting organizations or for a new or existing donor-advised fund, and is computed without carryovers and without the 0.5% floor.

    • 26 U.S.C. § 170 (LII), § 170(p)which would be determined under this section if the only charitable contributions taken into account in determining such deduction were contributions made in cash during such taxable year (determined without regard to subsections (b)(1)(G)(ii), (b)(1)(I), and (d)(1)) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(p)(1)-(2)to an organization described in section 509(a)(3), or (2) for the establishment of a new, or maintenance of an existing, donor advised fund Checked 2026-10-09.

  16. The § 170(p) deduction for non-itemizers (cash gifts, beginning 2026) does not apply to contributions for the establishment or maintenance of a donor-advised fund, or to § 509(a)(3) supporting organizations.

    • 26 U.S.C. § 170 (LII), § 170(p)(2)(2) for the establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2) ). Checked 2026-10-09.

  17. For a taxpayer who does not itemize, taxable income is AGI minus the standard deduction and other listed deductions, including the § 170(p) non-itemizer charitable deduction. That deduction therefore reduces taxable income but not AGI.

    • 26 U.S.C. § 63 (LII), § 63(b)the term “ taxable income ” means adjusted gross income , minus— (1) the standard deduction , (2) the deduction for personal exemptions provided in section 151, (3) any deduction provided in section 199A, (4) the deduction provided in section 170(p), Checked 2026-10-09.

  18. The 3.8% net investment income tax applies to the lesser of net investment income (which includes net gain from disposing of property) or modified AGI above a threshold. Gain that is never realized is not net gain — the avoidance is an inference.

    • 26 U.S.C. § 1411 (LII), § 1411(a)(1)a tax equal to 3.8 percent of the lesser of— (A) net investment income for such taxable year, or (B) the excess (if any) of— (i) the modified adjusted gross income for such taxable year, over (ii) the threshold amount . Checked 2026-10-09.
    • 26 U.S.C. § 1411 (LII), § 1411(c)(1)(A)(iii)net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property Checked 2026-10-09.

  19. Heirs generally take a basis equal to fair market value at the date of death, and inherited property sold within a year is treated as held more than 1 year.

    • 26 U.S.C. § 1014 (LII), § 1014(a)(1)(1) the fair market value of the property at the date of the decedent’s death, Checked 2026-10-09.
    • 26 U.S.C. § 1223 (LII), § 1223(9)such property is sold or otherwise disposed of by such person within 1 year after the decedent’s death, then such person shall be considered to have held such property for more than 1 year. Checked 2026-10-09.

  20. Cash gifts to § 170(b)(1)(A) organizations are limited to 60% of the contribution base (reduced by other § 170(b)(1)(A) contributions). P.L. 119-21 § 70425(b)(1) rewrote the provision and removed the prior 'before January 1, 2026' end date, so the 60% limit no longer sunsets.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(G)(i) (as amended)For taxable years beginning after December 31, 2017 , any contribution of cash to an organization described in subparagraph (A) shall be allowed as a deduction Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(G)(i)(I)60 percent of the taxpayer’s contribution base for the taxable year, over Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Amendment note, 2025—Subsec. (b)(1)(G)(i)Pub. L. 119–21, § 70425(b)(1) , amended cl. (i) generally. Prior to amendment, text read as follows: “In the case of any contribution of cash to an organization described in subparagraph (A), the total amount of such contributions which may be taken into account under subsection (a) for any taxable year beginning after December 31, 2017 , and before January 1, 2026 , shall not exceed 60 percent Checked 2026-10-09.

  21. Long-term appreciated capital-gain property given to a public charity is generally deductible at fair market value, limited to 30% of AGI; cash gifts to public charities are limited to 60% of AGI. Excess carries forward up to 5 years. Property held 1 year or less (ordinary income property) is limited to basis because the deduction is reduced by gain that would not be long-term.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(i)shall not exceed 30 percent of the taxpayer’s contribution base for such year. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(G)(i)(I) 60 percent of the taxpayer’s contribution base for the taxable year Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(d)(1)(A)paid in each of the 5 succeeding taxable years in order of time Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(1)(A)the amount of gain which would not have been long-term capital gain Checked 2026-10-09.
    • IRS Publication 526 (2025), Ordinary Income Propertycapital assets (defined later, under Capital Gain Property ) held 1 year or less. Checked 2026-10-09.

  22. Contributions to § 170(b)(1)(A) organizations (public charities, and the operating/pass-through/pooled private foundations described in § 170(b)(1)(F)) are generally limited to 50% of the contribution base, before the special 60% cash rule and the 30% capital-gain-property rule.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(A), flush languageshall be allowed to the extent that the aggregate of such contributions does not exceed 50 percent of the taxpayer’s contribution base for the taxable year. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(A)(vii)a private foundation described in subparagraph (F), Checked 2026-10-09.

  23. Contributions to organizations not described in § 170(b)(1)(A) (for example, most private non-operating foundations) are limited to the lesser of 30% of the contribution base or the remaining room under the 50% limit.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(B)Any charitable contribution other than a charitable contribution to which subparagraph (A) or (G) applies shall be allowed to the extent that the aggregate of such contributions does not exceed the lesser of— Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(B)(i)30 percent of the taxpayer’s contribution base for the taxable year, or Checked 2026-10-09.

  24. Gifts to organizations not covered by § 170(b)(1)(A), such as most private non-operating foundations, are deductible up to 30% of the contribution base (lower than the 60% cash limit for public charities, including DAF sponsors).

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(B)Any charitable contribution other than a charitable contribution to which subparagraph (A) or (G) applies shall be allowed to the extent that the aggregate of such contributions does not exceed the lesser of— (i) 30 percent of the taxpayer’s contribution base for the taxable year Checked 2026-10-10.

  25. Gifts of capital gain property to organizations not described in § 170(b)(1)(A) (e.g., most private non-operating foundations) are limited to the lesser of 20% of the contribution base or 30% less capital gain property gifts under § 170(b)(1)(C), and are counted last.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(D)(i)(I)20 percent of the taxpayer’s contribution base for the taxable year, or Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(D)(i), flush languageFor purposes of this subsection, contributions of capital gain property to which this subparagraph applies shall be taken into account after all other charitable contributions . Checked 2026-10-09.

  26. Gifts of long-term capital gain property to § 170(b)(1)(A) organizations (deducted at fair market value) are limited to 30% of the contribution base and are counted after other contributions except 20%-limit gifts.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(i)For purposes of this subsection, contributions of capital gain property to which this subparagraph applies shall be taken into account after all other charitable contributions (other than charitable contributions to which subparagraph (D) applies). Checked 2026-10-09.

  27. The 30%-of-AGI limit on capital gain property given to public charities is applied after all other charitable contributions (other than those under § 170(b)(1)(D)); the excess carries forward 5 years.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(i)contributions of capital gain property to which this subparagraph applies shall be taken into account after all other charitable contributions Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(ii)such excess shall be treated, in a manner consistent with the rules of subsection (d)(1), as a charitable contribution of capital gain property to which clause (i) applies in each of the 5 succeeding taxable years in order of time. Checked 2026-10-09.

  28. An amount disallowed by the 0.5% floor carries forward only from a year in which a percentage limit is also exceeded (so that an excess is carried forward anyway); in that case the floor-disallowed amount is added to the carryover. In a year where the AGI limits are not exceeded, the floor-disallowed amount is simply lost.

    • 26 U.S.C. § 170 (LII), § 170(d)(1)(C), headingContributions disallowed by 0.5-percent floor carried forward only from years in which limitation is exceeded Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(d)(1)(C)(i)In the case of any taxable year from which an excess is carried forward (determined without regard to this subparagraph) under any carryover rule , the applicable carryover rule shall be applied by increasing the excess Checked 2026-10-09.

  29. Under § 170(d)(1)(C), in a year from which an excess is carried forward under a carryover rule (determined without regard to the floor), that carryover is increased by the amount attributable to the contributions to which that rule applies that was disallowed by the 0.5% floor. Floor-disallowed amounts attributable to a category with no excess are not added.

    • 26 U.S.C. § 170 (LII), § 170(d)(1)(C)(i)In the case of any taxable year from which an excess is carried forward (determined without regard to this subparagraph) under any carryover rule , the applicable carryover rule shall be applied by increasing the excess determined under such applicable carryover rule for the contribution year (before the application of subparagraph (B)) by the amount attributable to the charitable contributions to which such rule applies which is not allowed as a deduction for the contribution year by reason of subsection (b)(1)(I). Checked 2026-10-09.

  30. When a spouse dies, the unused carryover allocable to that spouse can be used only on the deceased spouse's final return (separate return through date of death, or the joint return for the year of death); it cannot be used by the survivor in later years.

    • 26 CFR § 1.170A-10 (LII), § 1.170A-10(d)(4)(iii)any unused portion of an excess charitable contribution which is allocable in accordance with subdivision (i) of this subparagraph to such spouse shall not be treated as paid in the taxable year in which such death occurs or in any subsequent taxable year except on a separate return made for the deceased spouse by a fiduciary for the taxable year which ends with the date of death or on a joint return for the taxable year in which such death occurs. Checked 2026-10-09.

  31. A donor may elect to apply the 50% limit (instead of 30%) to capital gain property given to public charities, but must then reduce the deduction by the long-term gain (generally to basis). The election covers all such capital gain gifts for the year and affects carryovers.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(iii)At the election of the taxpayer (made at such time and in such manner as the Secretary prescribes by regulations), subsection (e)(1) shall apply to all contributions of capital gain property (to which subsection (e)(1)(B) does not otherwise apply) made by the taxpayer during the taxable year. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(A)shall be allowed to the extent that the aggregate of such contributions does not exceed 50 percent of the taxpayer’s contribution base for the taxable year. Checked 2026-10-09.
    • IRS Publication 526 (2025), Capital gain property electionIf you make this choice, you must reduce the FMV of the property contributed by the appreciation in value that would have been long-term capital gain if the property had been sold. Checked 2026-10-09.
    • IRS Publication 526 (2025), Capital gain property electionThis choice applies to all capital gain property contributed to 50% limit organizations during a tax year. It also applies to carryovers of this kind of contribution from an earlier tax year. Checked 2026-10-09.

  32. The election to apply the 50% limit to capital gain property (deducting basis instead of fair market value) must be made on the original return or on an amended return filed by the due date for filing the original return.

    • IRS Publication 526 (2025), Limits on Deductions, Capital gain property electionYou must make the choice on your original return or on an amended return filed by the due date for filing the original return. Checked 2026-10-09.

  33. Starting in 2026, itemized charitable deductions are allowed only to the extent total contributions exceed 0.5% of the taxpayer's contribution base (AGI). Disallowed amounts may carry forward only in limited circumstances (new § 170(d)(1)(C) — not reviewed).

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Effective date note, P.L. 119-21 § 70425(c)shall apply to taxable years beginning after December 31, 2025 . Checked 2026-10-09.

  34. The 0.5% floor applies to charitable contributions 'otherwise allowable (without regard to this subparagraph)' as a deduction, i.e., read here as the amount allowable after the percentage-of-AGI limits. This ordering is the reviewer's reading of the statute text; no IRS worked example was located.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)Any charitable contribution otherwise allowable (without regard to this subparagraph) as a deduction under this section shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base for the taxable year. Checked 2026-10-09.

  35. The 0.5% floor is applied first against 20%-limit capital gain gifts, then 30% capital gain gifts, then 30%-limit (other) gifts, then conservation gifts, then 50% gifts, and last against 60% cash gifts.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)(i)first, by taking into account charitable contributions to which subparagraph (D) applies to the extent thereof, Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)(vi)sixth, by taking into account charitable contributions to which subparagraph (G) applies to the extent thereof. Checked 2026-10-09.

  36. Starting in 2026, taxpayers in the 37% bracket have itemized deductions (including charitable) reduced by 2/37 of the lesser of total itemized deductions or taxable income above the 37% bracket threshold — effectively capping the tax value of a deduction at 35 cents per dollar. The "35% cap" is a shorthand, not statutory language.

    • 26 U.S.C. § 68 (LII), § 68(a)shall be reduced by 2 ⁄ 37 of the lesser of Checked 2026-10-09.
    • 26 U.S.C. § 68 (LII), Effective date note, P.L. 119-21 § 70111(c)shall apply to taxable years beginning after December 31, 2025 . Checked 2026-10-09.

  37. The § 68 reduction is 2/37 of the lesser of (1) itemized deductions or (2) taxable income, computed before § 68 and increased by itemized deductions, above the start of the 37% bracket. It is applied after every other limitation on itemized deductions (including the 0.5% floor and the AGI percentage limits).

    • 26 U.S.C. § 68 (LII), § 68(a)(2)so much of the taxable income of the taxpayer for the taxable year (determined without regard to this section and increased by such amount of itemized deductions ) as exceeds the dollar amount at which the 37 percent rate bracket under section 1 begins with respect to the taxpayer. Checked 2026-10-09.
    • 26 U.S.C. § 68 (LII), § 68(b)This section shall be applied after the application of any other limitation on the allowance of any itemized deduction. Checked 2026-10-09.

  38. When you transfer shares of a stock bought at different dates or prices and do not adequately identify the lot, the shares transferred are charged against the earliest lot acquired (first-in, first-out). For shares held by a broker, an adequate identification is made if you specify the particular shares to the broker at the time of the transfer and the broker confirms that specification in writing within a reasonable time.

    • 26 CFR § 1.1012-1 (LII), § 1.1012-1(c)(1)(i)if a taxpayer sells or transfers shares of stock in a corporation that the taxpayer purchased or acquired on different dates or at different prices and the taxpayer does not adequately identify the lot from which the stock is sold or transferred, the stock sold or transferred is charged against the earliest lot the taxpayer purchased or acquired to determine the basis and holding period of the stock Checked 2026-10-10.
    • 26 CFR § 1.1012-1 (LII), § 1.1012-1(c)(3)(i)Where the stock is left in the custody of a broker or other agent, an adequate identification is made if— (a) At the time of the sale or transfer , the taxpayer specifies to such broker or other agent having custody of the stock the particular stock to be sold or transferred, and (b) Within a reasonable time thereafter, confirmation of such specification is set forth in a written document from such broker or other agent. Checked 2026-10-10.

  39. The average basis method (averaging the cost of identical shares) is available for shares of a regulated investment company (mutual funds) and for shares acquired after 2010 through a dividend reinvestment plan, as an exception to the lot-identification rules.

    • 26 CFR § 1.1012-1 (LII), § 1.1012-1(e)(1)a taxpayer may use the average basis method described in paragraph (e)(7) of this section to determine the cost or other basis of identical shares of stock if— (i) The taxpayer leaves shares of stock in a regulated investment company (as defined in paragraph (e)(5) of this section) or shares of stock acquired after December 31, 2010, in connection with a dividend reinvestment plan Checked 2026-10-10.

  40. Form 8283 is required when the deduction for a noncash gift (or group of similar items) exceeds a dollar threshold set in the instructions; publicly traded securities are reported in Section A regardless of amount (no Section B appraisal); other property over the higher threshold goes in Section B. Basis need not be entered for publicly traded securities held over 12 months unless the basis election is made.

    • Instructions for Form 8283 (Rev. 12/2025), Who Must FileYou must file one or more Forms 8283 if the amount of your deduction for each noncash contribution is more than $500. Checked 2026-10-09.
    • Instructions for Form 8283 (Rev. 12/2025), Specific Instructions, Section A, SecuritiesFor donations of publicly traded securities in any amount, you should only use Section A. Checked 2026-10-09.
    • Instructions for Form 8283 (Rev. 12/2025), Requirement to fully complete Sections A and BFilers reporting a noncash charitable contribution of over $5,000 must fully complete Section B. Checked 2026-10-09.
    • Instructions for Form 8283 (Rev. 12/2025), Section A, Column (g)Do not complete this column for publicly traded securities held more than 12 months, unless you elect to limit your deduction cost basis. See section 170(b)(1)(C)(iii). Checked 2026-10-09.

  41. A CRAT or CRUT is not subject to federal income tax, so it can sell contributed appreciated assets without paying tax at the trust level; unrelated business taxable income is hit with a 100% excise tax. The IRS describes deferral of income tax on sales of contributed assets as a reason to create a CRT; the trust takes the donor's carryover basis.

    • 26 U.S.C. § 664 (LII), § 664(c)(1)shall, for any taxable year, not be subject to any tax imposed by this subtitle. Checked 2026-10-09.
    • 26 U.S.C. § 664 (LII), § 664(c)(2)(A)there is hereby imposed on such trust or unitrust an excise tax equal to the amount of such unrelated business taxable income. Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Reasons to create a charitable remainder trustAllow you to defer income taxes on the sale of assets transferred to the trust Checked 2026-10-09.
    • IRS: Charitable remainder trusts, How a charitable remainder trust worksThe trust's basis in the transferred assets is carryover basis, which is the same basis that it would be in the hands of the donor Checked 2026-10-09.

  42. Unrelated business taxable income includes income from debt-financed property — property held to produce income that is subject to acquisition indebtedness, such as a building with a mortgage on it. So for a charitable remainder trust, whose unrelated business taxable income is hit with a 100% excise tax under § 664(c)(2)(A), part of the income from a mortgaged asset is caught by that tax.

    • 26 U.S.C. § 512 (LII), § 512(b)(4)Notwithstanding paragraph (1), (2), (3), or (5), in the case of debt-financed property (as defined in section 514) there shall be included, as an item of gross income derived from an unrelated trade or business, the amount ascertained under section 514(a)(1), and there shall be allowed, as a deduction, the amount ascertained under section 514(a)(2). Checked 2026-10-11.
    • 26 U.S.C. § 514 (LII), § 514(b)(1)For purposes of this section, the term "debt-financed property" means any property which is held to produce income and with respect to which there is an acquisition indebtedness (as defined in subsection (c)) at any time during the taxable year Checked 2026-10-11.
    • 26 U.S.C. § 514 (LII), § 514(c)(1)For purposes of this section, the term "acquisition indebtedness" means, with respect to any debt-financed property, the unpaid amount of— Checked 2026-10-11.

  43. Charitable remainder trusts are irrevocable, and each CRT must file Form 5227 annually.

    • IRS: Charitable remainder trusts, How a charitable remainder trust worksCharitable remainder trusts are irrevocable. Assets that go in can't be taken back. Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Tax filingsCharitable remainder trusts must annually file Form 5227, Split-Interest Trust Information Return . Checked 2026-10-09.

  44. For an individual, capital losses are allowed first against capital gains. Any excess loss is deductible against other income only up to $3,000 a year ($1,500 for a married individual filing a separate return). A net capital loss beyond that is carried to the succeeding taxable year, keeping its short-term or long-term character.

    • 26 U.S.C. § 1211 (LII), § 1211(b)losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges, plus (if such losses exceed such gains) the lower of—(1) $3,000 ($1,500 in the case of a married individual filing a separate return), or (2) the excess of such losses over such gains. Checked 2026-10-11.
    • 26 U.S.C. § 1212 (LII), § 1212(b)(1)(A)-(B)the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year Checked 2026-10-11.

  45. If there were no sales of the security on the valuation date but there were sales within a reasonable period before and after it, fair market value is a weighted average of the means between the highest and lowest sales prices on the nearest trading date before and the nearest trading date after the valuation date.

    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)If there were no sales on the valuation date but there were sales on dates within a reasonable period both before and after the valuation date, the fair market value is determined by taking a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date. Checked 2026-10-11.
    • IRS Publication 561 (Rev. 12/2025), Stocks and Bonds, No sales on valuation dateIf there were no sales on the valuation date but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. Checked 2026-10-11.

  46. A share in an open-end investment company (a mutual fund) is valued at the fund's public redemption price for the valuation date, not at a mean between high and low quoted selling prices. If no redemption price is quoted for that date, the last price quoted for the first preceding day with a quotation applies.

    • 26 C.F.R. § 20.2031-8 (LII), § 20.2031-8(b)(1)The fair market value of a share in an open-end investment company (commonly known as a "mutual fund") is the public redemption price of a share. Checked 2026-10-11.
    • 26 C.F.R. § 20.2031-8 (LII), § 20.2031-8(b)(1)If there is no public redemption price quoted by the company for the applicable valuation date (e.g., the valuation date is a Saturday, Sunday, or holiday), the fair market value of the mutual fund share is the last public redemption price quoted by the company for the first day preceding the applicable valuation date for which there is a quotation. Checked 2026-10-11.

  47. A charitable deduction is allowed for the taxable year in which the contribution is paid. For a DAF, that is the year the donor contributes to the fund, regardless of when grants are later made to charities (grants are distributions by the sponsor, not contributions by the donor).

    • 26 U.S.C. § 170 (LII), § 170(a)(1)There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. Checked 2026-10-09.
    • IRS: Donor-advised funds, Overview paragraphOnce the donor makes the contribution, the organization has legal control over it. Checked 2026-10-09.

  48. A gift counts in the year it is unconditionally delivered: a mailed check in the year it is mailed, and a gift charged to a bank credit card in the year of the charge.

  49. A charitable contribution is ordinarily made when delivery is effected. A check counts on the date mailed or delivered if it clears; a stock certificate delivered to the donor's own bank or broker (as the donor's agent) or to the issuer for transfer is a completed gift only on the date the stock is transferred on the corporation's books.

    • 26 CFR § 1.170A-1 (LII), § 1.170A-1(b)Ordinarily, a contribution is made at the time delivery is effected. The unconditional delivery or mailing of a check which subsequently clears in due course will constitute an effective contribution on the date of delivery or mailing. Checked 2026-10-10.
    • 26 CFR § 1.170A-1 (LII), § 1.170A-1(b)If the donor delivers the stock certificate to his bank or broker as the donor's agent, or to the issuing corporation or its agent, for transfer into the name of the donee , the gift is completed on the date the stock is transferred on the books of the corporation . Checked 2026-10-10.

  50. An endorsed stock certificate is delivered on mailing; if handed to the donor's agent or the issuer for transfer, the gift is not complete until transfer on the corporation's books.

    • IRS Publication 526 (2025), When To Deduct, Stock certificateA properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity’s agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution isn’t delivered until the date the stock is transferred on the books of the corporation. Checked 2026-10-09.

  51. The QCD must satisfy § 170 deductibility rules (other than percentage limits), including the contemporaneous written acknowledgment requirement for gifts of $250 or more. Any benefit received (e.g., a gala dinner) can disqualify the QCD because the entire distribution must be deductible.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(C)only if a deduction for the entire distribution would be allowable under section 170 Checked 2026-10-09.
    • IRS Notice 2007-7, A-39including the substantiation requirements under § 170(f)(8). Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(A)No deduction shall be allowed under subsection (a) for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 2, QCDsyou must have the same type of acknowledgment of your contribution that you would need to claim a deduction for a charitable contribution. Checked 2026-10-09.

  52. The contemporaneous written acknowledgment for a gift of $250 or more must state the cash amount or describe (not value) property, say whether the charity provided goods or services in return, and estimate their value. It is contemporaneous if obtained by the earlier of the filing date or the extended due date.

    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(i)The amount of cash and a description (but not value) of any property other than cash contributed. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(ii)Whether the donee organization provided any goods or services in consideration, in whole or in part, for any property described in clause (i). Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(iii)A description and good faith estimate of the value of any goods or services referred to in clause (ii) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(C)an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of— (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (ii) the due date (including extensions) for filing such return. Checked 2026-10-09.

  53. A contemporaneous written acknowledgment must state the amount of cash contributed, whether the charity provided any goods or services in return, and a description and good-faith estimate of the value of any such goods or services (or a statement that they consisted solely of intangible religious benefits). It is contemporaneous if obtained by the earlier of the date the return is filed or the return's due date including extensions.

    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(i) The amount of cash and a description (but not value) of any property other than cash contributed. (ii) Whether the donee organization provided any goods or services in consideration, in whole or in part, for any property described in clause (i). (iii) A description and good faith estimate of the value of any goods or services referred to in clause (ii) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(C)an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of— (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (ii) the due date (including extensions) for filing such return. Checked 2026-10-09.

  54. A charity receipt (contemporaneous written acknowledgment) counts only if obtained by the earlier of the date the return is filed or the return's due date, including extensions.

    • 26 U.S.C. § 170 (LII), § 170(f)(8)(C)an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of— (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (ii) the due date (including extensions) for filing such return. Checked 2026-10-10.

  55. If total noncash contribution deductions for the year exceed $500, Form 8283 must be attached (Section A for items of $5,000 or less and publicly traded securities; Section B with a qualified appraisal for items over $5,000).

    • IRS Publication 526 (2025), Filing requirements, Form 8283If your total deduction for all noncash contributions for the year is over $500, you must complete Form 8283 and attach it to your Form 1040. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(11)(C)In the case of contributions of property for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal of such property Checked 2026-10-09.

  56. For contributions of property for which a deduction of more than $5,000 is claimed, the donor generally must obtain a qualified appraisal; the requirement does not apply to readily valued property such as cash and publicly traded securities. Other exceptions exist in the regulations (not reviewed here).

    • 26 U.S.C. § 170 (LII), § 170(f)(11)(C)the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal Checked 2026-10-10.
    • 26 U.S.C. § 170 (LII), § 170(f)(11)(A)(ii)(I)publicly traded securities (as defined in section 6050L(a)(2)(B)), and any qualified vehicle Checked 2026-10-10.

  57. A qualified appraisal is not required for a contribution of nonpublicly traded stock when the deduction claimed is more than $5,000 but not more than $10,000; above $10,000 the general qualified-appraisal requirement applies. The gift is still reported in Section B of Form 8283, which covers property for which a deduction of more than $5,000 per item or group of similar items is claimed.

    • 26 C.F.R. § 1.170A-13 (LII), § 1.170A-13(c)(2)(ii)(B)(1)The contribution of nonpublicly traded stock, if the amount claimed or reported as a deduction for the charitable contribution of such stock is greater than $5,000 but does not exceed $10,000; Checked 2026-10-11.
    • Instructions for Form 8283 (IRS), Which Sections To CompleteUse Section B to report donations of property for which you claimed a deduction of more than $5,000 per item or group of similar items. Checked 2026-10-11.

  58. The qualified appraisal requirement is keyed to the deduction claimed, not the property's value: it applies to contributions of property for which a deduction of more than $5,000 is claimed. In applying that threshold, the property and all similar items of property donated to one or more donees are treated as one property.

    • 26 U.S.C. § 170 (LII), § 170(f)(11)(C)In the case of contributions of property for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal of such property and attaches to the return for the taxable year in which such contribution is made such information regarding such property and such appraisal as the Secretary may require. Checked 2026-10-11.
    • 26 U.S.C. § 170 (LII), § 170(f)(11)(F)For purposes of determining thresholds under this paragraph, property and all similar items of property donated to 1 or more donees shall be treated as 1 property. Checked 2026-10-11.

  59. For the charitable substantiation rules, publicly traded securities are securities for which market quotations are readily available on an established securities market as of the date of contribution. Securities are not treated as publicly traded securities if they are subject to any restrictions that materially affect their value to the donor or prevent them from being freely traded.

    • 26 C.F.R. § 1.170A-13 (LII), § 1.170A-13(c)(7)(xi)(A)Securities for which (as of the date of contribution) market quotations are readily available on an established securities market. Checked 2026-10-11.
    • 26 C.F.R. § 1.170A-13 (LII), § 1.170A-13(c)(7)(xi)(C)(1)The securities are subject to any restrictions that materially affect the value of the securities to the donor or prevent the securities from being freely traded, Checked 2026-10-11.

  60. Pre-tax retirement accounts are income in respect of a decedent: the beneficiary who receives the right to the money includes it in gross income when received, and IRD gets no basis step-up at death.

    • 26 U.S.C. § 691 (LII), § 691(a)(1)shall be included in the gross income, for the taxable year when received, of: Checked 2026-10-09.
    • 26 U.S.C. § 691 (LII), § 691(a)(1)(B)the person who, by reason of the death of the decedent, acquires the right to receive the amount Checked 2026-10-09.
    • 26 U.S.C. § 1014 (LII), § 1014(c)This section shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691. Checked 2026-10-09.

  61. Taxable distributions from a traditional IRA are taxed as ordinary income; capital gain treatment does not apply, regardless of what the investments inside the IRA gained.

    • IRS Publication 590-B (2025), Ch. 1, Are Distributions Taxable? — Ordinary incomeDistributions from traditional IRAs that you include in income are taxed as ordinary income. No special treatment. In figuring your tax, you can't use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Checked 2026-10-10.

  62. Under Rev. Rul. 78-197 (in which the IRS announced it would follow Palmer v. Commissioner, 62 T.C. 684 (1974)), the IRS treats the proceeds of a sale or redemption of donated stock as the donor's income only if the charity is legally bound, or can be compelled, to give up the shares at the time of the gift. A charity that is merely expected to sell is not enough; a charity that is bound to sell shifts the gain back to the donor (assignment of income).