How to Accept Stock Donations: Brokerage, Policy, and IRS Forms

To accept stock donations, your nonprofit needs a brokerage account that can receive shares electronically, a written policy governing which securities you’ll take and how you’ll handle them, and a workflow that meets the IRS’s acknowledgment and reporting rules. For publicly traded shares, the mechanics are simple once the account exists. Closely held and restricted stock require more caution. Get the setup right and a stock gift can move from the donor’s broker to your operating budget in about a week.

Open a Brokerage Account That Can Receive Shares

A business checking account cannot hold equity shares. You need a brokerage account that participates in the Depository Trust Company’s electronic clearing system, which brokers describe as being “DTC-eligible.” Most major brokerages offer nonprofit accounts, and setup resembles opening any institutional investment account: you’ll provide your EIN, articles of incorporation, and a board resolution authorizing the account.

Once the account is active, your representative will give you two numbers you’ll share with every donor: your account number and the brokerage firm’s four-digit DTC participant number. The DTC number functions like a routing number for securities, telling the donor’s broker exactly where to deliver the shares. Keep both in a format you can send to donors or their advisors quickly. Delays at this stage are the single most common reason stock gifts stall.

Adopt a Gift Acceptance Policy

Before the first transfer arrives, your board should approve a written gift acceptance policy that covers securities. It doesn’t need to be long, but it needs to answer a few questions that will come up repeatedly.

Which securities will you accept? Publicly traded stock on major exchanges is easy to value and sell. Mutual fund shares, bonds, and stock in private companies carry different administrative costs and liquidity risks, and you may want to accept some and decline others.

Will you sell shares on receipt or hold them? Most nonprofits sell promptly to avoid market risk and turn the gift into operating funds. Spelling that out in advance protects staff from second-guessing and shields the organization from liability if the price drops between receipt and sale.

Who is authorized to execute trades in the brokerage account? And how will you handle offers of restricted or closely held stock, which involve legal and regulatory hurdles that publicly traded shares don’t? Those situations are worth flagging in the policy so no one has to improvise when the offer arrives.

Give the Donor the Information They Need

A donor who wants to transfer shares needs three things from you: your brokerage account number, the brokerage firm’s DTC participant number, and the legal name on the account exactly as it appears with the brokerage. Any mismatch in the account name can cause the receiving broker to reject the transfer, so verify this detail before sharing it.

Many organizations package this information into a one-page document, sometimes called a Stock Instruction Letter or Transfer Authorization Form. The donor hands it to their own broker to initiate the transfer. Ask the donor to send you the ticker symbol, number of shares, and their broker’s contact information so your team can confirm receipt. A clean, pre-formatted document eliminates back-and-forth and keeps the timeline short.

Receive and Value the Shares

The transfer happens electronically through DTC. Once the donor’s broker submits the instructions, shares typically land in your brokerage account within three to five business days. No sale occurs in between. The shares move “in kind,” meaning the donor’s ownership ends and yours begins without the stock being converted to cash.

The date the shares arrive matters for valuation and for the donor’s tax records. For an electronic DTC transfer, the IRS treats the contribution date as the date the stock is transferred on the books of the issuing corporation, which in practice is the settlement date when the shares appear in your account. Track the exact settlement date. It determines which trading prices you’ll use.

The IRS requires that donated publicly traded stock be valued at the average of the highest and lowest selling prices on the contribution date. If the day’s high was $50 and the low was $46, the fair market value is $48 per share. You don’t use the opening price, the closing price, or the price at the moment you eventually sell. If no trades occurred on the contribution date, an averaging method uses prices from the nearest trading dates before and after.¹

Record this valuation in your books as the gift amount for accounting purposes. The figure does not go on the donor’s acknowledgment letter, and the reason is explained below.

Sell the Shares

Once the shares settle, follow whatever protocol your policy prescribes. Most nonprofits sell immediately, and there are good reasons. Holding donated stock exposes you to market fluctuations and creates an investment management obligation many smaller organizations aren’t equipped to handle. If the price drops 20% while the shares sit in your account, part of the gift is gone.

Trading commissions on equity sales have dropped dramatically. Major online brokerages now charge $0 commissions for standard equity trades, so the cost of liquidating is minimal or nothing.²³ Your organization pays no capital gains tax on the sale regardless of how much the stock appreciated, because tax-exempt entities aren’t subject to capital gains on donated securities.

Send the Written Acknowledgment

Federal law requires a written acknowledgment for any charitable contribution of $250 or more. For stock, the acknowledgment must include your organization’s name, a description of the shares (company, number of shares, and the settlement date), and a statement about whether you provided any goods or services in return.⁴ If the gift was purely charitable, say so. If you provided something of value, such as event tickets or a dinner, describe it and give a good-faith estimate of its value.

Do not include a dollar value for the stock. The statute specifically calls for a “description (but not value) of any property other than cash contributed.”⁵ The donor determines fair market value for their own return, often with a tax advisor. A price on your receipt that differs from the donor’s calculation creates confusion and unnecessary exposure. Stick to describing the property: “100 shares of XYZ Corp common stock, received on March 15, 2026. No goods or services were provided in exchange for this contribution.”

File Form 8282 and Sign Form 8283 When Needed

If your organization sells donated stock within three years of receiving it, you must file IRS Form 8282 within 125 days of the sale.⁶ Since most nonprofits sell almost immediately, this applies to nearly every stock gift. The form reports what you received, when you received it, and what you got when you sold. A copy goes to the IRS and a copy to the donor. Missing the filing carries a per-return penalty under the general information return rules.⁷ Build Form 8282 into your post-sale workflow so it becomes automatic.

Separately, donors claiming a deduction of more than $500 for noncash contributions file Form 8283 with their own return. When the claimed value exceeds $5,000, the donor uses Section B, and your organization must sign the Donee Acknowledgment in Part V.⁸ Signing doesn’t commit you to a valuation. It confirms you received the described property. Donors may send this form weeks or months after the gift, so keep your transfer records accessible.

Closely Held and Restricted Stock

Not every stock gift involves shares you can sell on the open market the next morning. Two categories deserve extra caution.

Closely Held Stock

Shares in a private company have no daily high-low price to average. If the donor claims a deduction of more than $5,000 for nonpublicly traded stock, they must obtain a qualified appraisal from an appraiser who meets specific IRS education and experience requirements and who is not an excluded party such as the donor or donee.¹ Your organization then signs the Donee Acknowledgment on Form 8283, Section B.⁸

The bigger problem is liquidity. There’s no public market for privately held shares, and the issuing company may have a right of first refusal. Your gift acceptance policy should address closely held stock directly, setting minimum thresholds and requiring a clear path to liquidity before the transfer occurs.

Restricted Stock

Restricted securities are shares acquired directly from an issuer or affiliate in a transaction that didn’t involve a public offering. Under SEC Rule 144, the minimum holding period before resale is six months for stock in companies that file regular SEC reports, and one year for non-reporting companies.⁹ When a donor transfers restricted stock to your organization, those resale limits follow the shares.

You may not be able to sell for months after receiving the gift, during which the value can change significantly. You’ll also need to confirm the holding period has been met, verify adequate public information about the issuer is available, and potentially file a Form 144 notice of sale with the SEC. Unless your organization has securities counsel, restricted stock gifts are worth declining or accepting only after thorough due diligence. Require board-level or executive approval in your policy.

What Donors Should Know About Their Deduction

A donor’s tax picture isn’t your responsibility, but working knowledge helps you communicate clearly and avoid steering people into mistakes.

Stock Held More Than One Year

When a donor gives publicly traded stock they’ve owned for more than a year, they can generally deduct the full fair market value on the contribution date without paying capital gains tax on the appreciation. This is the main appeal of stock donations: a donor who bought shares at $10 that are now worth $50 deducts $50 per share and never pays tax on the $40 gain. The deduction for these long-term appreciated assets is capped at 30% of the donor’s adjusted gross income for the year, with any excess carrying forward for up to five years.¹⁰

Stock Held One Year or Less

If the donor held the stock for one year or less, the IRS treats it as ordinary income property. The deduction drops to the donor’s cost basis rather than current market value. A donor who paid $800 for stock now worth $1,000 can deduct only $800, because the $200 of appreciation would have been short-term gain if sold.¹⁰ At that point, the donor may be better off selling, paying the short-term tax, and donating the cash. Worth flagging in your donor communications so people don’t make a gift that’s less tax-efficient than a check.

The Partial Interest Rule

A donor cannot give stock while keeping voting rights, dividend income, or other rights in the shares. The IRS treats that as a partial interest, and it’s not deductible. To qualify, the donor must transfer their entire interest at the time of the gift.¹⁰

1
Internal Revenue Service. Publication 561 (12/2025), Determining the Value of Donated Property
2
Charles Schwab. Pricing
3
Fidelity. Trading Commissions and Margin Rates
4
Office of the Law Revision Counsel. 26 U.S. Code 170 – Charitable, Etc., Contributions and Gifts
5
Internal Revenue Service. Charitable Contributions: Written Acknowledgments
6
Internal Revenue Service. Form 8282 (Rev. October 2021) – Donee Information Return
7
Office of the Law Revision Counsel. 26 USC 6721 – Failure to File Correct Information Returns
8
Internal Revenue Service. Instructions for Form 8283 (Rev. December 2024)
9
eCFR. 17 CFR 230.144 – Persons Deemed Not to Be Engaged in a Distribution and Therefore Not Underwriters
10
Internal Revenue Service. Publication 526 (2025), Charitable Contributions