This problem involves transfers of property by T, an individual, to Suntan U, an

Question

This problem involves transfers of property by T, an individual, to Suntan U, and Private Foundation both as described in 1, above, in the current year. Assume that in the current year T has $200,000 " contribution base," all verification requirements are met, and unless otherwise stated T makes no other charitable gifts. T owns property with a basis of $70,000 and a value of $90,000. If the property is inventory (manufactured equipment) and T contributes it to Suntan U., what will Ts charitable deduction be? If the property is inventory (manufactured equipment) and T contributes it to Private Foundation, what will Ts charitable contribution be? If the property is corporate stock held for more than one year and T contributes it to Suntan U. what will T's charitable contribution be? Same as (c), above, except the stock has been held only five months. What result under the facts of (c), above, if T exercises the election proffered by 170(b)(1)(C)(iii)? What result if T gives Suntan U. 1250 property which if sold would be subject to $10,000 of 1250 recapture? Same as (c), above, except that the stock was given to Private Foundation rather than Suntan U. Assume the stock is not publicly traded. Cf. 170(e)(5). Same as (g), above, except that the stock is 170(e)(5) "qualified appreciated stock."

Explanation / Answer

a)In the case of charitable contributions of capital gain property to which subsection (e)(1)(B) does not apply, the total amount of contributions of such property which may be taken into account under subsection (a) for any taxable year shall not exceed 30 percent of the taxpayer’s contribution base for such year.

Value of contribution is $ 200,000 x 30% = 60,000

b) Faire market value will be the value of contribution provided which shall not exceed 50% of contribution base.

Then the valaue of contribution is $ 90,000

c)If charitable contributions of capital gain property exceeds 30 percent of the taxpayer’s contribution base for any taxable year, such excess shall be treated, in a manner consistent with the rules of subsection (d)(1), as a charitable contribution of capital gain property to which clause (i) applies in each of the 5 succeeding taxable years in order of time.

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