The Tax Law of Charitable Giving

the tax law of charitable giving

Discover a fully updated and comprehensive reference on US charitable tax law from a leading authority

As United States charitable tax law becomes ever more complex and byzantine, the need for a one-stop resource on foundational and advanced topics in this practice area has become acute. The comprehensively revised Sixth Edition of The Tax Law of Charitable Giving fills this niche. The book offers readers a fulsome, authoritative, and well-organized description of modern US tax laws on charitable giving

Ranging over the basics of US charitable giving law to the intricate details of contributions of various types of property and international giving, this accomplished nonprofit lawyer, professor, and author delves deeply into a wide variety of subjects concerning deductible (and nondeductible) charitable giving. In addition to fundamental topics such as the definition of gift and percentage limitations on charitable deductions, readers will learn about planned giving, donor-advised funds, the substantiation and appraisal requirements, reporting and disclosure laws, valuation pricinples, tax penalties, and more.

Ideal for lawyers, accountants, and other financial professionals who advise clients on charitable giving and tax matters, The Tax Law of Charitable Giving provides an authoritative reference on all aspects of philanthropy and federal tax law.

BRUCE R. HOPKINS is the principal in the Bruce R. Hopkins Law Firm, LLC, and the Professor from Practice at the Kansas University School of Law. He is the author of over forty books, including The Law of Tax-Exempt Organizations, Twelfth Edition, The Law of Fundraising, Fifth Edition, and The Tax Law of Private Foundations, Fifth Edition.

Preface

Book Citations

Part One Introduction to the Tax Law of Charitable Giving

1 Charitable Giving Law: Basic Concepts

§ 1.1 Introduction to the Charitable Contribution Deduction

§ 1.2 Defining Tax-Exempt Organizations

§ 1.3 Charitable Organizations Law Philosophy

§ 1.4 Statistical Profile of Charitable Sector

§ 1.5 History of Charitable Contribution Deduction

§ 1.6 Charitable Contribution Deduction Reform Proposals

2 Fundamental Concepts

§ 2.1 Definition of Gift

§ 2.2 Definition of Donor

§ 2.3 Definition of Charitable Organization

§ 2.4 Public Charities and Private Foundations

§ 2.5 Unrelated Business Law

§ 2.6 Factors Affecting Income Tax Deductibility of Charitable Gifts

§ 2.7 Charitable Organizations Listing Reliance Rules

§ 2.8 Grantor Trust Law

3 Contributions of Money and Property

§ 3.1 Contributions of Money

§ 3.2 Contributions of Property in General

§ 3.3 Contributions of Long-Term Capital Gain Property in General

§ 3.4 Contributions of Ordinary Income Property

§ 3.5 Certain Contributions of Capital Gain Property

§ 3.6 Contributions of Property for Unrelated Use

§ 3.8 Step Transaction Doctrine

§ 3.9 Charitable Pledges

Part Two Charitable Giving in General

4 Timing of Charitable Deductions

§ 4.1 Overview of Law

§ 4.2 Contributions of Money in General

§ 4.3 Contributions of Money by Check

§ 4.4 Contributions of Money by Credit Card

§ 4.5 Contributions of Money by Telephone

§ 4.6 Contributions of Securities

§ 4.7 Contributions of Copyright Interest

§ 4.8 Contributions by Means of Notes

§ 4.9 Contributions by Letters of Credit

§ 4.10 Contributions of Property Subject to Option

§ 4.11 Contributions of Stock Options

§ 4.12 Contributions of Credit Card Rebates

§ 4.13 Contributions of Tangible Personal Property

§ 4.14 Contributions of Real Property

§ 4.15 Contributions of Conservation Easements

§ 4.16 Contributions by C Corporations

§ 4.17 Contributions by S Corporations

§ 4.18 Contributions by Partnerships

§ 4.19 Contributions by Means of the Internet

5 Limitations on Annual Deductibility

§ 5.1 Introduction

§ 5.2 Individuals’ Contribution Base

§ 5.3 Corporations’ Taxable Income

§ 5.4 Percentage Limitations: An Overview

§ 5.5 Sixty Percent Limitation

§ 5.6 Fifty Percent Limitation

§ 5.7 Thirty Percent Limitation for Gifts of Certain Property

§ 5.8 Electable 50 Percent Limitation

§ 5.9 General 30 Percent Limitation

§ 5.10 Interplay of 50 Percent/Special 30 Percent Limitations

§ 5.11 Interplay of 50 Percent/General 30 Percent Limitations

§ 5.12 Interplay of Special 30 Percent/General 30 Percent Limitations

§ 5.13 Twenty Percent Limitation

§ 5.14 Qualified Conservation Contributions

§ 5.15 Conservation Contributions by Farmers and Ranchers

§ 5.16 Gifts for the Use of Charity

§ 5.17 Blending Percentage Limitations

§ 5.18 Rules for Spouses

§ 5.19 Information Requirements

§ 5.20 Percentage Limitation for Corporations

6 Estate and Gift Law

§ 6.1 Overview of Law

§ 6.2 Federal Gift Tax

§ 6.3 Federal Estate Tax

§ 6.4 Unification of Taxes

§ 6.5 Remainder Interests 319

§ 6.6 Ascertainability of Value of Charitable Interest

7 Unique Charitable Contribution Laws

§ 7.1 Works of Art

§ 7.2 Gems

§ 7.3 Inventory

§ 7.4 Scientific Research Property

§ 7.5 License to Use Patent

§ 7.6 Easements and Other Conservation Property

§ 7.7 S Corporation Stock

§ 7.8 Section 306 Stock

§ 7.9 Retirement Plan Accounts

§ 7.10 Commodity Futures Contracts

§ 7.11 Donors’ Creations

§ 7.12 Charity Auctions

§ 7.13 Services

§ 7.14 Unreimbursed Expenses

§ 7.15 Limitation on Deduction for Expenses Due to Pleasure

§ 7.16 Automobile Expenses

§ 7.17 Use of Property

§ 7.18 Bargain Sales

§ 7.19 Property Subject to Debt

§ 7.20 Future Interests in Tangible Personal Property

§ 7.21 Contributions by Trusts

§ 7.22 Taxidermy

§ 7.23 Clothing and Household Items

§ 7.24 Vehicles

§ 7.25 Intellectual Property

§ 7.26 Foreign Tax Credit

§ 7.27 Subsistence Whaling Expenses

§ 7.28 Virtual Currency Transactions

8 Additional Aspects of Deductible Giving

§ 8.1 Contributions by Means of an Agent

§ 8.2 Gifts for the Use of Charity

§ 8.3 Conditional Charitable Contributions

§ 8.4 Earmarking of Contributions for Individuals

§ 8.5 Interrelationship with Business Expense Deduction

§ 8.6 Denial of Deduction for Lobbying Activities

§ 8.7 Deductible Contributions to Noncharitable Organizations

§ 8.8 Reallocation of Deductions

§ 8.9 Funding of Terrorism

§ 8.10 Statute of Limitations

§ 8.11 Concept of Trust Income

§ 8.12 Unrelated Business Income Charitable Deduction

§ 8.13 Charitable Family Limited Partnerships

§ 8.14 Abusive Tax Transactions

§ 8.15 Public Policy Considerations

Part Three Planned Giving

9 Planned Giving and Valuation

§ 9.1 Planned Giving Fundamentals

§ 9.2 Partial Interests Law

§ 9.3 Overview of Valuation Law

§ 9.4 Standard Actuarial Factors

§ 9.5 General Actuarial Valuations

§ 9.6 Nonstandard Actuarial Factors

§ 9.7 Securities Laws

10 Charitable Remainder Trusts

§ 10.1 Definitions

§ 10.2 Charitable Remainder Annuity Trust Law

§ 10.3 Charitable Remainder Unitrust Law

§ 10.4 Issues

§ 10.5 Tax Treatment of Distributions

§ 10.6 Division of Charitable Remainder Trusts

§ 10.7 Basis in Disposition of Term Interest

§ 10.8 Taxation of Charitable Remainder Trusts

§ 10.9 Mandatory Provisions

§ 10.10 Private Foundation Law

§ 10.11 University Endowment Investment Sharing

§ 10.12 Charitable Remainder Trusts as Partners or Shareholders in REITs

§ 10.13 Wealth Replacement Trusts

§ 10.14 Calculation of Charitable Contribution Deduction

§ 10.15 Mergers of Charitable Remainder Trusts

§ 10.16 Early Terminations of Charitable Remainder Trusts

§ 10.17 Regular Termination of Charitable Remainder Trusts

11 Pooled Income Funds

§ 11.1 Definitions

§ 11.2 Qualifying Pooled Income Funds

§ 11.3 Allocation of Income

§ 11.4 Recognition of Gain or Loss on Transfers

§ 11.5 Mandatory Provisions

§ 11.6 Private Foundation Law

§ 11.7 Pass-Through of Depreciation

§ 11.8 Tax Status of Funds and Beneficiaries

§ 11.9 Multiorganization Pooled Income Funds

§ 11.10 Comparison with Charitable Remainder Trusts

§ 11.11 Charitable Contribution Deduction

12 Charitable Gift Annuities

§ 12.1 Contract as Vehicle Form

§ 12.2 Tax Treatment to Donor

§ 12.3 Deferred Payment Gift Annuities

§ 12.4 Estate and Gift Tax Consequences

§ 12.5 Unrelated Business Income Implications

§ 12.6 Unrelated Debt-Financed Income Implications

§ 12.7 Contrast with Other Planned Giving Methods

§ 12.8 Antitrust Laws

§ 12.9 Securities Laws

§ 12.10 Charitable Contribution Deduction

13 Other Types of Deductible Remainder Interests

§ 13.1 Overview of Law

§ 13.2 Qualifying Partial Interests

§ 13.3 Remainder Interests in Personal Residences or Farms

§ 13.4 Undivided Portions of Entire Interests in Property

14 Charitable Lead Trusts

§ 14.1 Overview of Law

§ 14.2 Income Interest

§ 14.3 Tax Treatment of Charitable Lead Trusts

§ 14.4 Testamentary Use of Charitable Lead Trusts

§ 14.5 Percentage Limitation Law

§ 14.6 Private Foundation Law

§ 14.7 Anti-Abuse Rule Concerning Income Interests

§ 14.8 Charitable Income Trusts

§ 14.9 Comparison with Charitable Remainder Trusts

§ 14.10 Valuing Charitable Deduction

§ 14.11 Charitable Contribution Deduction

15 Contributions of and Using Life Insurance

§ 15.1 Introduction

§ 15.2 Life Insurance Concepts

§ 15.3 Charitable Giving and Insurance

§ 15.4 Insurable Interest

§ 15.5 Unrelated Debt-Financed Income Law

§ 15.6 Charitable Split-Dollar Insurance Plans

§ 15.7 Insurance Contract Reporting Requirements

Part Four International Charitable Giving

16 International Giving by Individuals During Lifetime

§ 16.1 Introduction

§ 16.2 Background

§ 16.3 Earmarking and Conduit Restrictions

§ 16.4 Control over Foreign Donees

§ 16.5 Summary

§ 16.6 Income Tax Treaties

17 International Giving by Individuals by Means of Estates

§ 17.1 Introduction

§ 17.2 Estate Tax Law

§ 17.3 Gift Tax Law

§ 17.4 Charitable Giving by Noncitizen Nonresidents

18 International Giving by Corporations

§ 18.1 Contributions to U.S. Charities for Foreign Use

§ 18.2 Contributions of Money from Foreign Affiliate of U.S. Parent to Foreign Charities

§ 18.3 Contributions of Goods or Services to Benefit Foreign Charities

§ 18.4 Grants of Funds from U.S.-Related Foundation to Foreign Charities

Part Five Administration of Charitable Giving Programs

19 Substantiation and Appraisal Law

§ 19.1 Introduction

§ 19.2 Substantiation Law for Charitable Monetary Contributions

§ 19.3 Substantiation Law for Charitable Contributions of $250 or More

§ 19.4 Substantiation Law for Noncash Charitable Contributions

§ 19.5 Substantiation Law for Contributions for Conservation Purposes

§ 19.6 Substantiation Law for Contributions of Motor Vehicles, Boats, and Airplanes

§ 19.7 Substantiation Law for Contributions to Donor-Advised Funds

§ 19.8 Appraisal Law

§ 19.9 Appraisals of Clothing and Household Items

§ 19.10 Recordkeeping Law

20 Disclosure Law

§ 20.1 Disclosure by Charitable Organizations in General

§ 20.2 Quid Pro Quo Contribution Law

§ 20.3 Disclosure by Noncharitable Organizations

21 Special Events, Corporate Sponsorships, and Donor-Advised Funds

§ 21.1 IRS Audit Guidelines

§ 21.2 Special Events

§ 21.3 Corporate Sponsorship Rules

§ 21.4 Donor-Advised Funds

22 Reporting Law

§ 22.1 Contribution Reporting by Individuals

§ 22.2 Contribution Reporting by C Corporations

§ 22.3 Contribution Reporting by S Corporations

§ 22.4 Contribution Reporting by Partnerships

§ 22.5 Contribution Reporting by Donees in General

§ 22.6 Contribution Reporting in Unrelated Business Context

§ 22.7 Noncash Contributions Reporting Law in General

§ 22.8 Reporting of Contributions of Vehicles

§ 22.9 Reporting of Contributions of Intellectual Property

§ 22.10 Reporting on Dispositions of Contributed Property

§ 22.11 Personal Benefit Contract Reporting Law

§ 22.12 Split-Interest Trust Filing Law

23 Valuation Principles and Various Penalties

§ 23.1 Valuation of Property—General Principles

§ 23.2 Valuation of Works of Art

§ 23.3 Valuation of Securities

§ 23.4 Valuation of Other Types of Property

§ 23.5 Other Court Valuation Cases

§ 23.6 Federal Tax Penalties

§ 23.7 Burden of Proof Rules

§ 23.8 Burden of Production and Procedural Rules

24 State Fundraising Law

§ 24.1 State Regulation in General

§ 24.2 Historical Perspective

§ 24.3 States’ Police Power

§ 24.4 Basic Definitions

§ 24.5 Registration Law

§ 24.6 Reporting Law

§ 24.7 Exemptions from Regulation

§ 24.8 Fundraising Cost Limitations

§ 24.9 Prohibited Acts

§ 24.10 Contractual Law

§ 24.11 Disclosure Law

About the Author

About the Online Resources

Index

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