Discussion:Charitable Gift Annuity - brokerage reported stock sales to TP on 1099-B

I'm checking with all the parties involved to see if I can get more details about the actual transaction but wanted to ask here if: 1) this sounds like an error on the part of the brokerage; 2) this could possibly be an error on the part of the client / charity in how they structured the transaction; 3) this is correct reporting and the 1099-B transactions should be handled in the client's 1040, related to the capital gains amount reported on the 1099-R?

I think most of the transaction is correct but am concerned about this 1099-B from the brokerage. But maybe I'm misguided here...

I have contacted the charitable organization, and they indicated they had intended to set this up so there was not a taxable event with regard to the mutual funds for the taxpayer.

So I think I may be missing something on my end with respect to how to properly report the mutual fund transaction on the taxpayer's tax return. I'm thinking maybe report the sales with a basis in the amount of FMV so there is no gain on the taxpayer's Sch D with a statement explaining the contribution? But that doesn't seem correct.

I'm still working on settling this issue if anyone has experience in this area, I still would value your input.

Happy final 18 days all...counting 'em down! Hang in there everyone...

You have to report it the way it happened, let the taxpayer pay the tax, and let him get angry with the charity for screwing this up.

You have to be ethical and do what is right according to what happened. You can't ignore the information you were provided - they were sold while in his account.

it is your job to report it accurately

In this case, I am trying to confirm through this resource that an error has occurred here. Given the serious nature of this error, I'm looking for as much information as I can in an area that I believe is not that commonplace. I certainly am beginning to believe that an error has occurred in this transaction.

If you're telling me that you have some expertise in the area of Charitable Gift Annuities (and from your profile and many other excellent posts, I think you might) and that you can tell from the information that I have provided that the charity messed this up; that the capital gain definitely should be included on the taxpayer's 2007 tax return; then I am inclined to accept that.

So far the folks who I previously believed had the most experience in this matter -- the charitable organization -- are telling us they did it correctly, so I consider my job at this point, as a service to my client, to confirm these facts through as many sources as possible, including this board and possibly including another practitioner.

I also consider it part of my job to assist this client, who believed the charitable organization handled this correctly, in understanding how it was messed up and what possible options he might have at this point. If the only option open to him is to pay the capital gains, then that certainly is an option that he will need to understand and deal with. I just don't think I should present my client that option and confront the church with this error until I am certain about the answers.

If you want to find these posts, just search on the term 'ethics'.

I would hate to see any Enrolled Agent fall to that same level.

Discussion:Charitable Remainder Trust - Confirmation

Anyway, I know my client's beef is not with me. But he is elderly and was told one thing and another seems to have happened. My intention is to help him through this process, including approaching the church with him once we have the answer.

I just read this post: http://www.taxalmanac.org/index.php/Discussion:Tax_Payer_died_and_Stocks_were_sold_in_her_Tax_ID - esp Jdugan's reply. Obviously the issue of the death of the taxpayer in this post and stepped-up basis are different but this is how my thought started along the lines as far as process for reporting to match the 1099-B with zero gain/loss and explaining that the stocks were transferred to the charity and then sold by them not by the TP.

Again, thanks, if you have thoughts after looking at the post above, let me know; otherwise: everyone back to work!

Planned Giving Design Center

Gift Law Pro you will have to find the other articles, this is just one I bookmarked, but go to the root directory and root around

PS - I'll echo someone else's sentiments I read on the board: If you come out to the West Coast for presentations, I'd try to attend! I also wish they'd bring the NTPI seminar closer. I am planning on attending that some day.