The Tax Law of Charitable Giving, 5th Edition

Chapter FourGifts of Money and Property

1. § 4.1 Gifts of Money
2. § 4.2 Gifts of Property in General
3. § 4.3 Gifts of Long-Term Capital Gain Property in General
4. § 4.4 Gifts of Ordinary Income Property
   1. (a) Ordinary Income Property Defined
   2. (b) Deduction Reduction Rule
   3. (c) Special Rules of Inapplicability
5. § 4.5 Certain Gifts of Capital Gain Property
   1. (a) General Deduction Reduction Rule
   2. (b) Qualified Appreciated Stock
6. § 4.6 Gifts of Property for Unrelated Use
   1. (a) Special Rule
   2. (b) Unrelated Use
   3. (c) Recapture of Deduction
7. § 4.7 Variations in Applying Property Rules
8. § 4.8 Step Transaction Doctrine
9. § 4.9 Charitable Pledges

This chapter summarizes the federal tax law concerning the determination of the income tax charitable deduction for contributions of money or property, when the donor is not retaining or creating any interest in the item being transferred. The calculation of this deduction must be made under these rules before application of the general percentage limitations.¹ Contributions of money or property, when the donor is creating an interest in the item being transferred, are subject to other rules.²

§ 4.1 Gifts of Money

A U.S. individual or corporation may make a contribution of money—usually U.S. currency—to a charitable organization. The income tax deduction for this donation is based on the amount of funds being transferred.

Example 4.1

X, an individual, makes a contribution of $1,000 to a charitable organization during calendar year 2014. Consequently, X can claim ...