Private Foundations: Tax Law and Compliance, 4th Edition

Chapter FourteenCharitable Giving Rules

1. § 14.1 General Rules
   1. (a) Deduction Variables
   2. (b) Percentage Limitations
   3. (c) Estate and Gift Tax Deductions
2. § 14.2 Gifts of Appreciated Property
3. § 14.3 Deductibility of Gifts to Foundations
4. § 14.4 Deduction Reduction Rules
   1. (a) Capital Gain Property Deduction Rule
   2. (b) Qualified Appreciated Stock Rule
   3. (c) Other Deduction Reduction Rules
5. § 14.5 Planned Giving Revisited
6. § 14.6 Administrative Considerations
   1. (a) Record-Keeping Rules
   2. (b) Substantiation Rules
   3. (c) Disclosure Rules
   4. (d) Appraisal Rules
   5. (e) Reporting Requirements
   6. (f) State Fundraising Regulation

§ 14.1 General Rules

Federal law provides an income tax charitable contribution deduction. Consequently, individuals who itemize deductions, as well as corporations, can deduct, subject to varying limitations, an amount equivalent to the value of a contribution made to a qualified charitable donee.¹ In general, a contribution is a payment where the donor does not expect anything of consequence in return for having made the gift.² A charitable contribution is a gift to or for the use of a qualified charitable entity, such as a private foundation.³

(a) Deduction Variables

The extent of the income tax charitable deduction is dependent in part on whether the charitable donee is a public charity or a private foundation.⁴ Another basic element in determining whether, or the extent to which, a contribution to charity is deductible is the nature of the property contributed: capital gain property ...