How to Report a Stock Donation on Your Tax Return

To report a stock donation on your tax return, complete Form 8283 (Noncash Charitable Contributions) and carry the deductible amount to line 12 of Schedule A on Form 1040. For stock held longer than one year and given to a public charity, you deduct the fair market value on the date of the gift, capped at 30% of your adjusted gross income.¹ Only itemizers benefit, and the 2026 standard deduction is $16,100 for single filers and $32,200 for joint filers, so your itemized total needs to clear that bar for this to help you.²

Value the Shares First

The value you report drives everything else, so pin it down before you touch the forms. For publicly traded securities, fair market value is the average of the highest and lowest quoted selling prices on the contribution date.³ If the high was $52 and the low was $48, your per-share value is $50. Most brokerage statements show both figures. If the stock didn’t trade on the contribution date, use the average of the high and low on the nearest trading dates before and after, weighted by the number of trading days from the contribution date.

Mutual funds work differently because they don’t trade intraday. Fair market value is the public redemption price (net asset value) on the date you relinquished control of the shares, which the fund company can provide.³

Then check the holding period. Stock held more than one year is long-term capital gain property, and you deduct full fair market value.⁴ Stock held one year or less is treated as ordinary income property, and your deduction drops to cost basis.⁵ If you paid $800 for shares now worth $1,000 but you’ve owned them five months, your deduction is $800. Verify your acquisition date before initiating any transfer near the one-year mark.

Apply the Deduction Limits

Gifts of capital gain property to public charities (most 501(c)(3) organizations, including universities, hospitals, and community foundations) are capped at 30% of AGI.¹ At $200,000 of AGI, that’s a $60,000 maximum stock deduction for the year regardless of how much you gave.

Anything above the limit carries forward for up to five tax years, following the same percentage rules each year. Unused carryforward after five years expires permanently.¹

The 0.5% AGI Floor Starting in 2026

For tax year 2026 and after, the first 0.5% of your AGI in total charitable contributions is not deductible. Congress enacted this floor in the One Big Beautiful Bill Act.¹ With $300,000 of AGI, the first $1,500 of combined giving (cash, stock, everything) produces no deduction, and only amounts above that count. Any carryforward used in 2026 or later runs through this same floor.

Gather Documentation Before You File

Pull together the charity’s full legal name and address, the transfer date, the number of shares, the ticker symbol or security description, your acquisition date, and your cost basis (original purchase price, adjusted for splits or reinvested dividends).⁵

For any donation of $250 or more, the charity must give you a written acknowledgment stating whether you received any goods or services in return. You need this in hand before you file the return for the contribution year.⁶ There is no required format, but the letter must contain enough detail to substantiate the deduction. If you contributed to a donor-advised fund or community foundation, the sponsoring organization issues the acknowledgment.

Fill Out Form 8283

Form 8283 has two sections, and picking the right one depends on what you gave and how much you’re claiming.

Section A covers publicly traded securities and any noncash gifts where you’re claiming $5,000 or less per item. Publicly traded stock goes here even when the deduction runs well above $5,000. Enter the company name, number of shares, ticker symbol, whether it’s a mutual fund, contribution date, acquisition date, cost basis, and fair market value.⁷

Section B is required for non-publicly traded property worth more than $5,000, which is where private company shares typically land. This section requires a qualified appraisal from a qualified appraiser, obtained before you file.³ A qualified appraiser has verifiable education and experience in valuing the specific type of property, generally including relevant college-level coursework and at least two years buying, selling, or valuing similar assets, and must include a declaration of qualifications in the appraisal itself. The appraiser signs Part IV of Section B, and an authorized representative of the charity signs the Donee Acknowledgment in Part V.⁷ Publicly traded securities are exempt from the appraisal requirement no matter the value.⁸

Move the Deduction to Schedule A

Transfer the total value of your noncash charitable contributions to line 12 of Schedule A (Form 1040).⁹ If your total noncash contributions for the year exceed $500, you must attach the completed Form 8283 to your return. E-filing software will prompt you to attach it as a PDF. On paper, place it behind Form 1040.⁷

Penalties for Overstating Value

Claiming an inflated value on donated stock carries real cost. If your claimed value reaches 150% or more of the correct amount, the substantial valuation misstatement rule triggers a 20% penalty on the resulting underpayment. At 200% or more, the gross valuation misstatement penalty doubles to 40%. The penalty applies only when the underpayment attributable to the misstatement exceeds $5,000 ($10,000 for C corporations).¹⁰

The 20% penalty can be defeated by showing reasonable cause and good faith, which requires both a qualified appraisal from a qualified appraiser and a genuine investigation into the property’s value.¹¹ That defense is unavailable for gross valuation misstatements on charitable deductions. At the 200% threshold, no showing of good faith cancels the 40% penalty.

How Long to Keep the Records

Hold onto everything for at least three years from the filing date, or two years from the date you paid the tax, whichever is later. That matches the general IRS assessment window.¹² The window stretches to six years if income was underreported by more than 25% of gross income. When you carry forward unused deductions, keep the records until three years after filing the return on which the last carryforward is used, because the IRS can go back to verify the original contribution.

Records should include the brokerage confirmation of the transfer, the charity’s written acknowledgment, your purchase records showing cost basis and acquisition date, any qualified appraisal, and a copy of Form 8283. Legible digital copies are acceptable.

1
Office of the Law Revision Counsel. 26 U.S. Code 170 – Charitable, Etc., Contributions and Gifts
2
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
3
Internal Revenue Service. Publication 561 – Determining the Value of Donated Property
4
Office of the Law Revision Counsel. 26 USC 1222 – Other Terms Relating to Capital Gains and Losses
5
Internal Revenue Service. Publication 526 – Charitable Contributions
6
Internal Revenue Service. Substantiating Charitable Contributions
7
Internal Revenue Service. Instructions for Form 8283 (Rev. December 2025)
8
Internal Revenue Service. Charitable Organizations – Substantiating Noncash Contributions
9
Internal Revenue Service. Instructions for Schedule A (Form 1040)
10
Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty
11
Internal Revenue Service. Reasonable Cause and Good Faith
12
Internal Revenue Service. How Long Should I Keep Records?