Donated Stocks
Is your church set up to receive donated stocks? Donors may prefer to donate stock directly to the church, rather than sell and donate the cash. By donating the stock directly, they get a charitable donation for the current market value of the stock, while avoiding capital gains tax on any appreciation.
You will need to set up an account with a brokerage firm in order to receive the donated stock in the church name. Most churches then immediately liquidate (sell) the stock and transfer the funds into the church account to be used as needed (or for the stated designated purpose for the donation). Due to the volatility of equities, it is not advisable for a church to own stock in individual companies.
Stocks are considered a non-cash contribution. There are certain IRS requirements for documenting stock donations. The donor must fill out Part A of Form 8283, as well as obtain a proper acknowledgment from the church acknowledging the stock gift. There are no special reporting forms that the church must use. The church should send a letter to the donor thanking them for the donation, listing a description of what was donated, but without including the value of the stock (that is the responsibility of the donor). The letter is required to include the statement that “no goods or services were received for this donation”.