Only cash contributions (e.g., checks, credit card charges) are acceptable in 529 plans. You’ll have to sell the stock and donate the proceeds. If the stock has appreciated, you’ll owe capital gains tax on your profits; if the value has declined, you’ll be able to take a tax loss.
A mutual-fund distribution allocated to gains realized on the sale of fund portfolio assets. You report the distribution as long-term capital gain even if you held the fund shares short term.