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  Gains, losses and costs on securities gifts. Frequently Asked Questions

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The contribution should be booked at the amount at the actual date the security was received.

The exact valuation will be determined by the tax rules for your country.

The costs and any subsequent gain or loss will usually be netted and the amounts transferred into the fund when the securities are sold.

The donor will normally be recognized for the original amount, but the fund may actually have more or less money in it than the original gift. More of an issue if it is less, but it can also represent another opportunity to go to the donor and have them make up the difference.

It can get even more complicated if a donor makes an original pledge that will be paid off with securities transactions. In these cases, the payments are often not equal, and stock fluctuations can cause dramatic changes in values from the original pledge amount.

Gains and losses and costs can also be recoded in a single fund, separate from the fund a donor's original gift is put in. In theory, this will average out over time in the same way that a similar account can be used for pledges received and paid in foreign currency, however in an extended bear market, it may be difficult to keep the fund from going into a negative balance.
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