Читать книгу The Tax Law of Charitable Giving - Bruce Hopkins R., Bruce R. Hopkins, David Middlebrook - Страница 79
NOTES
Оглавление2 2 See Part Three.
3 3 E.g., § 7.28 (concerning transactions in virtual currency).
4 4 See § 19.2.
5 5 Reg. § 1.170A-1(c)(1).
6 6 See § 23.1.
7 7 See § 3.4.
8 8 Reg. § 1.170A-1(c)(1).
9 9 As one court stated, “[d]onating appreciated property to a charity allows the taxpayer to avoid paying tax that would arise if the taxpayer instead sold the property and donated the cash proceeds” (Dickinson v. Commissioner, T.C. Memo. 2020-128 (2020)). Likewise, White v. Brodrick, 104 F. Supp. 213 (D. Kan. 1952); Campbell v. Prothro, 209 F.2d 331 (5th Cir. 1954); Rev. Rul. 55-531, 1955-2 C.B. 520; Rev. Rul. 55-275, 1955-1 C.B. 295; Rev. Rul. 55-138, 1955-1 C.B. 223, modified by Rev. Rul. 68-69, 1968-1 C.B. 80.
10 10 The most common example of this is the rule in connection with bargain sales (see § 7.18). Another instance is gifts of property subject to debt (see § 7.19).
11 11 See § 2.2.
12 12 See § 2.5.
13 13 See § 23.1.
16 16 Reg. § 1.170A-1(c)(1). Long-term capital gain is defined as gain from the disposition of capital assets held for more than one year (IRC § 1223(3)).As one court stated (somewhat more expansively than is actually the law): “Congress, in an effort to encourage contributions to charitable organizations, has seen fit to permit a donor to deduct the full value of any gift of appreciated property without reporting as income from an exchange the appreciation in the value of the property which is thereby transferred” (Sheppard v. United States, 361 F.2d 972, 977-78 (Ct. Cl. 1966)). A federal court of appeals stated that the “fair market value standard is as close to a generalized valuation standard as there is in the tax code” (Schwab v. Commissioner, 715 F.3d 1169, 1179 (9th Cir. 2013)). The U.S. Tax Court declared that the “concept of fair market value has always been part of the warp and woof of our income, estate, and gift tax laws, and . . . [thus] the necessity of determining fair market values . . . for . . . numerous purposes has always been a vital and unavoidable function of the tax administration and judicial process” (Nestle Holdings, Inc. v. Commissioner, 94 T.C. 803, 815 (1990)). It was held that the fair market valuation standard is applicable in the context of charitable giving by trusts (see § 7.22) (Green v. United States, 2015 WL 1482508), but that decision was reversed, with the appellate court holding that the deduction amount is confined to the donor's adjusted basis in the properties, with the lower court's holding held to be contrary to the language of the statute (IRC § 642(c)(1)) and effectively allowing a “duplicative tax benefit” (Green v. United States, 880 F.3d 579 (10th Cir. 2018)). It is a “well-established rule that a gift of appreciated property does not result in income to the donor” (Greene v. United States, 13 F.3d 577, 584 (2d Cir. 1994)).
17 17 See § 3.4(b).
18 18 Reg. § 1.170A-4(b)(1).
19 19 See § 7.3.
20 20 This type of stock, known as section 306 stock, is described in IRC § 306(a). The IRS summarized the tax treatment of a charitable gift of section 306 stock in Priv. Ltr. Rul. 8930001. See § 7.8.
21 21 IRC § 341.
22 22 IRC § 1248.
23 23 IRC § 1231(b).
24 24 IRC § 170(e)(1), last sentence; Reg. § 1.170A-4(c)(4). The recapture rules are the subject of IRC §§ 617(d)(1), 1245(a), 1250(a), 1252(a), and 1254(a).
25 25 Reg. § 1.170A-4(b)(1).
26 26 See § 3.3.
27 27 E.g., Pasqualini v. Commissioner, 103 T.C. 1, 5 (1994).
28 28 In one instance, the IRS ruled that an individual, who purchased books at a volume discount from a company located in a country where the retail price was legally fixed and then imported them into the United States, warehoused the books for a period just beyond the capital gain holding period, and then donated them to charitable organizations, was engaged in an activity tantamount to the activities of a book dealer, so that the books were held to be ordinary income property (Rev. Rul. 79-419, 1979-2 C.B. 107). In another instance, the IRS ruled that an individual who raised ornamental plants as a hobby and each year donated a large number of them to various charitable organizations was engaged in activities substantially equivalent to those of commercial dealers, so that the contributed property was held to be ordinary income property (Rev. Rul. 79-256, 1979-2 C.B. 105). The IRS also so ruled in an instance involving an individual, not an art dealer, who purchased a substantial part of the total limited edition of a particular lithograph print and donated the prints to various art museums (id.).
29 29 E.g., Pasqualini v. Commissioner, 103 T.C. 1, 5 (1994) (Christmas cards acquired for purpose of giving them to a religious organization held to be capital assets); Sandler v. Commissioner, 52 T.C.M. (CCH) 563 (1986) (grave sites acquired to donate to a church three times in five years held to be capital assets, even though donor was engaged in business of selling like property commercially); Hunter v. Commissioner, 51 T.C.M. (CCH) 1533 (1986) (limited edition prints acquired for charitable giving purposes held to be capital assets). In contrast is Lindsley v. Commissioner, 47 T.C.M. (CCH) 540 (1983) (parcels of land contributed by real estate broker to charitable organization held to be ordinary income property).
30 30 IRC § 170(a); Reg. § 1.170A-1(c)(1).
31 31 IRC § 170(e)(1)(A); Reg. § 1.170A-4(a)(1). E.g., Grainger v. Commissioner, 116 T.C.M. (CCH) 107, 111, note 5 (2018).
32 32 In one instance, this charitable deduction reduction rule was held inapplicable because the property involved was held for at least one year, the property was a capital asset (and thus not, as the IRS contended, held primarily for sale to customers in the ordinary course of a business), and any gain that it would have generated would have been long-term capital gain (Duval v. Commissioner, 68 T.C.M. (CCH) 1375 (1994)).
33 33 Tech. Adv. Mem. 200119005.
34 34 See § 2.4.
35 35 See § 8.2.
37 37 Reg. § 1.170A-4(a), last paragraph.
38 38 IRC § 453(d).
39 39 IRC § 454(b).
40 40 Reg. § 1.170A-4(a), last paragraph.
41 41 Reg. § 1.170A-4(c)(5), last sentence. This type of gain is the subject of IRC § 871(a) or § 881. A for-profit corporation, intending to contribute fully depreciated real property (described in IRC § 1250) to one or more charitable organizations, represented to the IRS that the charities will have a basis in the gift property equal to the corporation's basis in the property at the time of transfer (IRC § 1015(a)). Dispositions of property of this nature can cause some of the resulting gain to be treated as ordinary income (IRC § 1250(a)). This rule does not apply, however, where the disposition is a gift (IRC § 1250(d)). Under these circumstances, the IRS ruled that the charitable deduction attributable to the value of the contribution will not be reduced pursuant to a special rule, which causes the deduction to be reduced by 20 percent of the accumulated depreciation of the property (IRC § 291(a)(1)) (Priv. Ltr. Rul. 201318003).
42 42 See § 23.1.
43 43 IRC § 170(e)(1)(B)(ii), by cross-reference to the three types of private foundations referenced in IRC § 23.1)(1)(F). The law concerning these three entities is discussed in § 2.4.
44 44 IRC § 170(e)(1)(B)(ii); Reg. § 1.170A-4(b)(2)(i).
45 45 See § 8.2.
47 47 IRC § 170(e)(5)(A).
48 48 IRC § 170(e)(5)(B).
49 49 Todd v. Commissioner, 118 T.C. 334 (2002).
50 50 The court concluded that the market quotations requirement has the same meaning for the purpose of defining the phrase qualified appreciated stock and in determining when securities are publicly traded so as to exempt a donor from the appraisal requirements (see § 19.4(c), text accompanied by note 141).
51 51 Priv. Ltr. Rul. 200702031.
52 52 IRC § 170(e)(5)(C)(i).
53 53 IRC § 170(e)(5)(C)(ii). The term member of the family has the same meaning as that referenced in IRC § 267(c)(2), which is that the family of an individual “include[s] only his [or her] brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants.” IRC § 267(e)(4). For purposes of applying this 10 percent limitation, the fact that the private foundation subsequently disposed of qualified appreciated securities is irrelevant (the stock contributed is still subject to the limitation that securities contributed from an estate are not attributable to an individual for purposes of computing the limitation (because an income tax charitable contribution deduction was not claimed or allowable, IRC § 170(e)(1)(B)(ii)), and, in applying the limitation, securities are valued as of the time of their original contribution (i.e., they are not revalued when subsequent contributions are made). Priv. Ltr. Rul. 200112022.
54 54 E.g., Priv. Ltr. Rul. 9247018.
55 55 IRC § 170(e)(1)(B)(i)(I); Reg. § 1.170A-4(b)(2)(ii).
56 56 IRC § 170(e)(1)(B)(i)(II). See § 3.6(c).
57 57 For this purpose, a fixture that is intended to be severed from real property is treated as tangible personal property. Reg. § 1.170A-4(b)(2), last sentence.
58 58 See § 2.3.
59 59 See § 8.2.
61 61 Reg. § 1.170A-4(b)(3)(i).
62 62 Id. The last of these rules is of particular importance in the context of planned giving, where property contributed is often given to a trust, such as a charitable remainder trust (see, in particular, ch. 10).
63 63 Reg. § 1.170A-4(b)(3)(ii)(a).
64 64 Reg. § 1.170A-4(b)(3)(ii)(b).
65 65 Id.
66 66 IRC § 170(e)(7)(C).
67 67 IRC § 170(e)(7)(B).
68 68 IRC § 170(e)(7)(A).
69 69 IRC § 170(e)(7)(D).
70 70 IRC § 6720B. Other penalties may also apply, such as the penalty for aiding and abetting the understatement of tax liability (IRC § 6701). See § 23.6(b).
71 71 See § 3.3.
72 72 E.g., Martin v. Machiz, 251 F. Supp. 381 (D. Md. 1966); Magnolia Dev. Corp. v. Commissioner, 19 T.C.M. (CCH) 934 (1960).
73 73 This sidestep of the step transaction doctrine has its basis in Palmer v. Commissioner, 62 T.C. 684 (1974), aff'd on another issue, 523 F.2d 1308 (8th Cir. 1975), to which the IRS agreed in Rev. Rul. 78-197, 1978-1 C.B. 83. In Palmer, a gift of stock in a closely held corporation to a charitable organization, followed by a prearranged redemption, was not recharacterized as a redemption between the donor and the redeeming corporation and a later gift of the redemption proceeds to the charity. This was the outcome, although the donor held voting control over both the corporation and the charitable organization. The IRS lost the case because the charity was not legally bound to redeem the stock, nor was the corporation in a position to compel the redemption.
74 74 Greene v. United States, 806 F. Supp. 1165 (S.D.N.Y. 1992). This case also involved application of the rules concerning anticipatory assignments of income (see § 3.1(g)). This case was affirmed in an opinion containing an extensive discussion of the step transaction doctrine as it applies in the charitable giving setting. 13 F.3d 577 (2d Cir. 1994).
75 75 IRC § 1256(a)(3).
76 76 IRC § 170(e)(1)(A). See § 3.4(b).
77 77 See § 3.3.
78 78 See § 2.1(h).
79 79 Greene v. United States, 806 F. Supp. 1165, 1172 (S.D.N.Y. 1992).
80 80 Id. at 1173.
81 81 Blake v. Commissioner, 697 F.2d 473 (2d Cir. 1982), aff'g 42 T.C.M. (CCH) 1336 (1981).
82 82 S.C. Johnson & Son, Inc. v. Commissioner, 63 T.C. 778 (1975).
83 83 Id. at 780.
84 84 Grove v. Commissioner, 490 F.2d 241, 246 (2d Cir. 1973).
85 85 Id.
86 86 Id. at 247.
87 87 Id.
88 88 Humacid Co. v. Commissioner, 42 T.C. 894, 913 (1964). This observation is often quoted (e.g., Grove v. Commissioner, 490 F.2d 241, 246 (2d Cir. 1973); Carrington v. Commissioner, 476 F.2d 704, 708 (5th Cir. 1973); Dickinson v. Commissioner, T.C. Memo. 2020-128 (2020)).
89 89 Martin v. Machiz, 251 F. Supp. 381, 390 (D. Md. 1966).
90 90 Magnolia Dev. Corp. v. Commissioner, 19 T.C.M. (CCH) 934, 937 (1960). Also Palmer v. Commissioner, 468 F.2d 705 (10th Cir. 1972); Tatum v. Commissioner, 400 F.2d 242 (5th Cir. 1968); Friedman v. Commissioner, 346 F.2d 506 (6th Cir. 1965).
91 91 Sheppard v. United States, 361 F.2d 972, 978 (Ct. Cl. 1966). Also Behrend v. United States, 73-1 U.S.T.C. ¶ 9123 (4th Cir. 1972); Fox v. Commissioner, 27 T.C.M. (CCH) 1001 (1968).
93 93 Priv. Ltr. Rul. 9452020.
94 94 Priv. Ltr. Rul. 9452026. An application of the step transaction doctrine, albeit not entailing a charitable contribution, was made available when a court disregarded a series of transactions entered into by a family involving the purchase of ranch properties and subsequent tax-free exchanges of these properties with family-controlled entities (True v. United States, 190 F.3d 1165 (10th Cir. 1999)).
95 95 Rev. Rul. 55-410, 1955-1 C.B. 297.
96 96 E.g., Priv. Ltr. Rul. 200202034.
97 97 E.g., Priv. Ltr. Rul. 200241044.
98 98 IRC § 163(a).
99 99 Peerless Indus., Inc. v. United States, 94-1 U.S.T.C. ¶ 50,043 (E.D. Pa. 1994).
100 100 Id. at 83,174.
101 101 IRC § 170(a)(2).
102 102 See § 2.4(c).
103 103 IRC § 4946 (see Private Foundations ch. 4).
104 104 IRC § 4941 (see Private Foundations ch. 5).
105 105 Reg. § 53.4941(d)-2(c)(3).
106 106 Reg. §§ 53.4941(d)-2(f)(2), 53.4941(d)-2(f)(4), Example (4).
107 107 Rev. Rul. 77-160, 1977-1 C.B. 351, 352.
