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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29516
Experience:  Taxes, Immigration, Labor Relations
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I have gains in some stock options calls, can I donate them

Customer Question

Hi
I have gains in some stock options calls, can I donate them to a charity and get the deduction like a stock that i would gift?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Yes - stock options may be donated - that is not an issue.
However the main question - whether you may claim deduction of the fair market value of these options?
That determination is mainly based on a following rule - if the gain realized if options were sold is qualified for a long term capital gain tax treatment - you may deduct a fair market value as a charitable contribution.
However - if that gain is taxed as a short term capital gain or ordinary income - you may deduct only your basis.

Expert:  Lev replied 1 year ago.

Please see fro reference - page 7

https://www.irs.gov/pub/irs-pdf/p526.pdf

If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction.

then - see page 11

If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.

Property is ordinary income property if you would have recognized ordinary income or short term capital gain had you sold it at fair market value on the date it was contributed.

The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short term capital gain if you sold the property for its fair market value. Generally, this rule limits the deduction to your basis in the property.

Let me know if you need any help with reporting.

Expert:  Lev replied 1 year ago.

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