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Charlie Davis wants to make a $20,000 charitable contribution to the United Way to support the financial literacy program. Although he does not have the cash available, he is thinking about selling an investment and donating the proceeds. He owns 1,000 shares of XYZ stock (FMV $20,000; A/B $12,000) that he purchased six months ago and 500 shares of ABC stock (FMV $20,000; A/B $6,000) that he purchased two years ago. Both companies are listed on the New York Stock Exchange. Charlie Davis expects his adjusted gross income to be $75,000 (from his company pension, social security, and other investments). Assume he does not plan to sell any other capital assets during the year (2013). Charlie Davis expects the investments to yield similar returns in the future, and he is not partial towards keeping either stock. What should he do? What documentation is required to support the charitable contribution?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M946615

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