Читать книгу The Tax Law of Charitable Giving - Bruce Hopkins R., Bruce R. Hopkins, David Middlebrook - Страница 68

Often, as noted, the rule for the deduction arising from a gift of property to a charitable organization is that the amount of the deduction is equal to the amount of the fair market value of the property at the time of the gift.³⁰ In the case of a charitable gift of ordinary income property, however, the amount of the charitable contribution for the gift of the property must be reduced by the amount of gain that would have been recognized as gain, which is not long-term capital gain, if the property had been sold by the donor at its fair market value, determined at the time of the contribution to the charitable organization.³¹ The amount of gain that is taken into account in making this reduction is sometimes termed the ordinary income element.

Consequently, this deduction reduction rule basically means that a donor's deduction for a contribution of an item of ordinary income property to a charitable organization is confined to the donor's basis in the property. The amount that is deductible is the fair market value of the property, reduced by the amount that is equal to the ordinary income element.³² In one case, a company that contributed its film library to a charitable organization was advised by the IRS that its charitable contribution deduction was zero, in that the library was akin to letters and memoranda and, thus, was not a capital asset. Because the costs associated with establishing the library were expensed as incurred, the basis in the property was zero. The value of the property contributed had to be reduced by its full amount.³³

This rule applies:

 Irrespective of whether the donor is an individual or a corporation

 Irrespective of the tax classification of the charitable organization that is the donee (for example, public or private charity)³⁴

 Irrespective of whether the charitable contribution is made to or for the use of a charitable organization³⁵

 To a gift of ordinary income property prior to application of the appropriate percentage limitation(s)³⁶