Members of the Maryland Association of Certified Public...

Tax questions

March 20, 1998

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: Last year I donated some stock to a charity. How do I claim that on my 1040 form?

A: Contributions of noncash assets to charity are deducted on Form 1040, Schedule A, line 16. Generally, the amount of the contribution you will be entitled to deduct will equal the fair market value of the stock as of the contribution date. However, if the stock has appreciated, certain additional restrictions will apply. First, the fair market value of the stock must be reduced by any gain that would not have been long-term in nature, had the stock not been sold (this will not be an issue if the stock was held longer than 12 months before the contribution).

Additionally, the amount of the deduction you will be entitled to claim this year cannot exceed 30 percent of your adjusted gross income (see line 32 on page 1 of Form 1040). Any amounts not currently deductible due to the 30 percent limitation can be carried forward and used in subsequent years, subject to the same 30 percent limitation.

Paul O. Wallace, CPA, C. W. Amos & Co.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial, The Sun's telephone information service, at (410) 783-1800. Call 268-7736 in Anne Arundel County, 836-5028 in Harford County, 848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code vTC 6225 after the greeting. You can also submit questions by e-mail through The Sun's Web site:

Selected questions will be answered in the Business section. No questions will be answered personally.

Pub Date: 3/20/98

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