Charitable Giving with Tangible Personal Property: A Tax Primer

Temple, Philip T.; Zale, Laurence C.
January 2005
Journal of Financial Planning;Jan2005, Vol. 18 Issue 1, p56
Academic Journal
• Gifts of tangible personal property present complex philanthropic issues such as valuation and tax. Financial planners need to work closely with independent tangible personal property advisors, lawyers, and charitable organizations to be sure their clients maximize their gifting opportunities. • Tangible personal property is broadly defined in the tax code as any property, other than land or buildings, that can be seen or touched, such as jewelry, coins, artwork, and timber, which under specific circumstances qualifies as a gift to charitable organizations. But whether a specific gift qualifies as tax deductible will depend on factors related to that specific type of property. For example, some coins may qualify as tangible personal property, while others may not. • How the property is held by the donor, whether the property can be put to use by the charitable organization, and whether the gift is of present or future interest also affects the scope and nature of the income tax deduction. • For example, if the donated appreciated property is related to the objectives of the public charity, the deduction is based on the fair market value and is available to the extent of 30 percent of the donor's adjusted gross income. Donated property not related to the mission qualifies for a smaller deduction. • Tangible personal property donated in exchange for charitable gift annuities, pooled income funds, and charitable remainder and lead trusts presents an additional set of rules. • Future interest rules do not apply to contributions of an undivided fractional interest in tangible personal property. INSET: Executive Summary.


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