Donating appreciated stock and property.

Two kinds of property

Publication 526 splits appreciated property into two groups. Capital gain property is property that would have produced a long-term capital gain had you sold it at fair market value (FMV) on the date of the gift, which includes capital assets held more than one year. Capital assets include stocks, bonds, jewelry, coin or stamp collections, and cars or furniture used for personal purposes. Ordinary income property is property on which you would have recognized ordinary income or short-term capital gain, such as inventory, works of art created by the donor, and capital assets held one year or less.

The deduction amount

For capital gain property you can generally use the FMV. For ordinary income property the deduction is FMV minus the amount that would be ordinary income or short-term capital gain on a sale, which generally limits it to basis. The publication’s example: stock held 5 months, worth $1,000 on the day of the gift with a basis of $800, produces a deduction of $800, because the $200 of appreciation would be short-term capital gain.

When capital gain property is reduced anyway

You must reduce the FMV by the amount that would have been long-term capital gain, generally to basis, in these cases: the property is given to certain private nonoperating foundations; you choose the 50% limit instead of the 30% limit; the property is intellectual property or certain taxidermy property; or it is tangible personal property put to an unrelated use by the charity or, above $5,000, sold or disposed of in the gift year without the required certification. Gifts of qualified appreciated stock to private foundations are the exception to the foundation rule. Qualified appreciated stock is capital gain property stock with readily available market quotations on an established securities market on the day of the gift, and it stops counting to the extent you and your family gave more than 10% of the value of all outstanding stock of the corporation.

Which AGI limit applies

Anything over the limit is a carryover. Excess contributions can be deducted in each of the next 5 years until used up, subject to the same percentage limits. If you carry over 30%-limit capital gain property and later choose the 50% limit, you must refigure the carryover to account for appreciation.

Timing and records

A properly endorsed stock certificate counts as delivered on the date of mailing or other delivery to the charity or its agent. If you give the certificate to your agent or to the issuing corporation for transfer to the charity’s name, the gift is not delivered until the stock is transferred on the corporation’s books. For a security under $250 you need a receipt naming the issuer, the type of security and whether it is publicly traded. Over $500 in total noncash gifts you complete Form 8283, and publicly traded securities go in Section A even above $5,000. The publication says digital assets are not publicly traded securities for Form 8283 purposes unless they are publicly traded stock or indebtedness, and appraisal rules apply above $5,000.

Worked example

Hypothetical. You give a church shares you bought for $2,500 and held three years, worth $10,000 on the day of the gift. Your AGI is $80,000 and you have no other gifts. The deduction is the full $10,000 FMV, and the 30% limit is $24,000, so it is fully deductible. If you instead choose the 50% limit, the gift is reduced to basis, $2,500. Giving the same shares after 8 months would also produce $2,500.

Penalty

An overstated value or basis can cost a 20% accuracy-related penalty, or 40% at 200% of the correct amount, when the overstatement underpays tax by more than $5,000.

Related

See the 30 percent AGI limit, carryovers and bargain sales. The capital gains tax calculator shows the tax you avoid by giving rather than selling.

Sources

• IRS Publication 526 (2025), Charitable Contributions: the sections cited on this page. Read November 2, 2026.
• IRS Tax Exempt Organization Search: the tool Pub 526 names (IRS.gov/TEOS) for checking whether an organization can receive deductible gifts. Pointed to, not queried.

Edition read: Publication 526 (2025), for use in preparing 2025 returns. Its “How To Get Tax Help” section notes that P.L. 119-21 (July 4, 2025) enacted tax reform, with updates at IRS.gov/OBBB; this page states no 2026 changes that the publication text does not spell out, so check the 2026 edition when it is released. Where the publication refers to Pub 544, Pub 561 or the Instructions for Form 8283 for more detail, this page does not restate those documents. This page summarizes the publication and does not replace it.