26 U.S.C. § 170 : US Code - Section 170: Charitable, etc., contributions and gifts

Search 26 U.S.C. § 170 : US Code - Section 170: Charitable, etc., contributions and gifts

    (a) Allowance of deduction
      (1) General rule
        There shall be allowed as a deduction any charitable
      contribution (as defined in subsection (c)) payment of which is
      made within the taxable year. A charitable contribution shall be
      allowable as a deduction only if verified under regulations
      prescribed by the Secretary.
      (2) Corporations on accrual basis
        In the case of a corporation reporting its taxable income on
      the accrual basis, if - 
          (A) the board of directors authorizes a charitable
        contribution during any taxable year, and
          (B) payment of such contribution is made after the close of
        such taxable year and on or before the 15th day of the third
        month following the close of such taxable year,

      then the taxpayer may elect to treat such contribution as paid
      during such taxable year. The election may be made only at the
      time of the filing of the return for such taxable year, and shall
      be signified in such manner as the Secretary shall by regulations
      prescribe.
      (3) Future interests in tangible personal property
        For purposes of this section, payment of a charitable
      contribution which consists of a future interest in tangible
      personal property shall be treated as made only when all
      intervening interests in, and rights to the actual possession or
      enjoyment of, the property have expired or are held by persons
      other than the taxpayer or those standing in a relationship to
      the taxpayer described in section 267(b) or 707(b). For purposes
      of the preceding sentence, a fixture which is intended to be
      severed from the real property shall be treated as tangible
      personal property.
    (b) Percentage limitations
      (1) Individuals
        In the case of an individual, the deduction provided in
      subsection (a) shall be limited as provided in the succeeding
      subparagraphs.
        (A) General rule
          Any charitable contribution to - 
            (i) a church or a convention or association of churches,
            (ii) an educational organization which normally maintains a
          regular faculty and curriculum and normally has a regularly
          enrolled body of pupils or students in attendance at the
          place where its educational activities are regularly carried
          on,
            (iii) an organization the principal purpose or functions of
          which are the providing of medical or hospital care or
          medical education or medical research, if the organization is
          a hospital, or if the organization is a medical research
          organization directly engaged in the continuous active
          conduct of medical research in conjunction with a hospital,
          and during the calendar year in which the contribution is
          made such organization is committed to spend such
          contributions for such research before January 1 of the fifth
          calendar year which begins after the date such contribution
          is made,
            (iv) an organization which normally receives a substantial
          part of its support (exclusive of income received in the
          exercise or performance by such organization of its
          charitable, educational, or other purpose or function
          constituting the basis for its exemption under section
          501(a)) from the United States or any State or political
          subdivision thereof or from direct or indirect contributions
          from the general public, and which is organized and operated
          exclusively to receive, hold, invest, and administer property
          and to make expenditures to or for the benefit of a college
          or university which is an organization referred to in clause
          (ii) of this subparagraph and which is an agency or
          instrumentality of a State or political subdivision thereof,
          or which is owned or operated by a State or political
          subdivision thereof or by an agency or instrumentality of one
          or more States or political subdivisions,
            (v) a governmental unit referred to in subsection (c)(1),
            (vi) an organization referred to in subsection (c)(2) which
          normally receives a substantial part of its support
          (exclusive of income received in the exercise or performance
          by such organization of its charitable, educational, or other
          purpose or function constituting the basis for its exemption
          under section 501(a)) from a governmental unit referred to in
          subsection (c)(1) or from direct or indirect contributions
          from the general public,
            (vii) a private foundation described in subparagraph (F),
          or
            (viii) an organization described in section 509(a)(2) or
          (3),

        shall be allowed to the extent that the aggregate of such
        contributions does not exceed 50 percent of the taxpayer's
        contribution base for the taxable year.
        (B) Other contributions
          Any charitable contribution other than a charitable
        contribution to which subparagraph (A) applies shall be allowed
        to the extent that the aggregate of such contributions does not
        exceed the lesser of - 
            (i) 30 percent of the taxpayer's contribution base for the
          taxable year, or
            (ii) the excess of 50 percent of the taxpayer's
          contribution base for the taxable year over the amount of
          charitable contributions allowable under subparagraph (A)
          (determined without regard to subparagraph (C)).

        If the aggregate of such contributions exceeds the limitation
        of the preceding sentence, such excess shall be treated (in a
        manner consistent with the rules of subsection (d)(1)) as a
        charitable contribution (to which subparagraph (A) does not
        apply) in each of the 5 succeeding taxable years in order of
        time.
        (C) Special limitation with respect to contributions described
          in subparagraph (A) of certain capital gain property
            (i) In the case of charitable contributions described in
          subparagraph (A) 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.
          For purposes of this subsection, contributions of capital
          gain property to which this subparagraph applies shall be
          taken into account after all other charitable contributions
          (other than charitable contributions to which subparagraph
          (D) applies).
            (ii) If charitable contributions described in subparagraph
          (A) of capital gain property to which clause (i) applies
          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.
            (iii) At the election of the taxpayer (made at such time
          and in such manner as the Secretary prescribes by
          regulations), subsection (e)(1) shall apply to all
          contributions of capital gain property (to which subsection
          (e)(1)(B) does not otherwise apply) made by the taxpayer
          during the taxable year. If such an election is made, clauses
          (i) and (ii) shall not apply to contributions of capital gain
          property made during the taxable year, and, in applying
          subsection (d)(1) for such taxable year with respect to
          contributions of capital gain property made in any prior
          contribution year for which an election was not made under
          this clause, such contributions shall be reduced as if
          subsection (e)(1) had applied to such contributions in the
          year in which made.
            (iv) For purposes of this paragraph, the term "capital gain
          property" means, with respect to any contribution, any
          capital asset the sale of which at its fair market value at
          the time of the contribution would have resulted in gain
          which would have been long-term capital gain. For purposes of
          the preceding sentence, any property which is property used
          in the trade or business (as defined in section 1231(b))
          shall be treated as a capital asset.
        (D) Special limitation with respect to contributions of capital
          gain property to organizations not described in subparagraph
          (A)
          (i) In general
            In the case of charitable contributions (other than
          charitable contributions to which subparagraph (A) applies)
          of capital gain property, the total amount of such
          contributions of such property taken into account under
          subsection (a) for any taxable year shall not exceed the
          lesser of - 
              (I) 20 percent of the taxpayer's contribution base for
            the taxable year, or
              (II) the excess of 30 percent of the taxpayer's
            contribution base for the taxable year over the amount of
            the contributions of capital gain property to which
            subparagraph (C) applies.

          For purposes of this subsection, contributions of capital
          gain property to which this subparagraph applies shall be
          taken into account after all other charitable contributions.
          (ii) Carryover
            If the aggregate amount of contributions described in
          clause (i) exceeds the limitation of clause (i), 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.
        (E) Contributions of qualified conservation contributions
          (i) In general
            Any qualified conservation contribution (as defined in
          subsection (h)(1)) shall be allowed to the extent the
          aggregate of such contributions does not exceed the excess of
          50 percent of the taxpayer's contribution base over the
          amount of all other charitable contributions allowable under
          this paragraph.
          (ii) Carryover
            If the aggregate amount of contributions described in
          clause (i) exceeds the limitation of clause (i), such excess
          shall be treated (in a manner consistent with the rules of
          subsection (d)(1)) as a charitable contribution to which
          clause (i) applies in each of the 15 succeeding years in
          order of time.
          (iii) Coordination with other subparagraphs
            For purposes of applying this subsection and subsection
          (d)(1), contributions described in clause (i) shall not be
          treated as described in subparagraph (A), (B), (C), or (D)
          and such subparagraphs shall apply without regard to such
          contributions.
          (iv) Special rule for contribution of property used in
            agriculture or livestock production
            (I) In general
              If the individual is a qualified farmer or rancher for
            the taxable year for which the contribution is made, clause
            (i) shall be applied by substituting "100 percent" for "50
            percent".
            (II) Exception
              Subclause (I) shall not apply to any contribution of
            property made after the date of the enactment of this
            subparagraph which is used in agriculture or livestock
            production (or available for such production) unless such
            contribution is subject to a restriction that such property
            remain available for such production. This subparagraph
            shall be applied separately with respect to property to
            which subclause (I) does not apply by reason of the
            preceding sentence prior to its application to property to
            which subclause (I) does apply.
          (v) Definition
            For purposes of clause (iv), the term "qualified farmer or
          rancher" means a taxpayer whose gross income from the trade
          or business of farming (within the meaning of section
          2032A(e)(5)) is greater than 50 percent of the taxpayer's
          gross income for the taxable year.
          (vi) Termination
            This subparagraph shall not apply to any contribution made
          in taxable years beginning after December 31, 2011.
        (F) Certain private foundations
          The private foundations referred to in subparagraph (A)(vii)
        and subsection (e)(1)(B) are - 
            (i) a private operating foundation (as defined in section
          4942(j)(3)),
            (ii) any other private foundation (as defined in section
          509(a)) which, not later than the 15th day of the third month
          after the close of the foundation's taxable year in which
          contributions are received, makes qualifying distributions
          (as defined in section 4942(g), without regard to paragraph
          (3) thereof), which are treated, after the application of
          section 4942(g)(3), as distributions out of corpus (in
          accordance with section 4942(h)) in an amount equal to 100
          percent of such contributions, and with respect to which the
          taxpayer obtains adequate records or other sufficient
          evidence from the foundation showing that the foundation made
          such qualifying distributions, and
            (iii) a private foundation all of the contributions to
          which are pooled in a common fund and which would be
          described in section 509(a)(3) but for the right of any
          substantial contributor (hereafter in this clause called
          "donor") or his spouse to designate annually the recipients,
          from among organizations described in paragraph (1) of
          section 509(a), of the income attributable to the donor's
          contribution to the fund and to direct (by deed or by will)
          the payment, to an organization described in such paragraph
          (1), of the corpus in the common fund attributable to the
          donor's contribution; but this clause shall apply only if all
          of the income of the common fund is required to be (and is)
          distributed to one or more organizations described in such
          paragraph (1) not later than the 15th day of the third month
          after the close of the taxable year in which the income is
          realized by the fund and only if all of the corpus
          attributable to any donor's contribution to the fund is
          required to be (and is) distributed to one or more of such
          organizations not later than one year after his death or
          after the death of his surviving spouse if she has the right
          to designate the recipients of such corpus.
        (G) Contribution base defined
          For purposes of this section, the term "contribution base"
        means adjusted gross income (computed without regard to any net
        operating loss carryback to the taxable year under section
        172).
      (2) Corporations
        In the case of a corporation - 
        (A) In general
          The total deductions under subsection (a) for any taxable
        year (other than for contributions to which subparagraph (B)
        applies) shall not exceed 10 percent of the taxpayer's taxable
        income.
        (B) Qualified conservation contributions by certain corporate
          farmers and ranchers
          (i) In general
            Any qualified conservation contribution (as defined in
          subsection (h)(1)) - 
              (I) which is made by a corporation which, for the taxable
            year during which the contribution is made, is a qualified
            farmer or rancher (as defined in paragraph (1)(E)(v)) and
            the stock of which is not readily tradable on an
            established securities market at any time during such year,
            and
              (II) which, in the case of contributions made after the
            date of the enactment of this subparagraph, is a
            contribution of property which is used in agriculture or
            livestock production (or available for such production) and
            which is subject to a restriction that such property remain
            available for such production,

          shall be allowed to the extent the aggregate of such
          contributions does not exceed the excess of the taxpayer's
          taxable income over the amount of charitable contributions
          allowable under subparagraph (A).
          (ii) Carryover
            If the aggregate amount of contributions described in
          clause (i) exceeds the limitation of clause (i), such excess
          shall be treated (in a manner consistent with the rules of
          subsection (d)(2)) as a charitable contribution to which
          clause (i) applies in each of the 15 succeeding years in
          order of time.
          (iii) Termination
            This subparagraph shall not apply to any contribution made
          in taxable years beginning after December 31, 2011.
        (C) Taxable income
          For purposes of this paragraph, taxable income shall be
        computed without regard to - 
            (i) this section,
            (ii) part VIII (except section 248),
            (iii) any net operating loss carryback to the taxable year
          under section 172,
            (iv) section 199, and
            (v) any capital loss carryback to the taxable year under
          section 1212(a)(1).
      (3) Temporary suspension of limitations on charitable
        contributions
        In the case of a qualified farmer or rancher (as defined in
      paragraph (1)(E)(v)), any charitable contribution of food - 
          (A) to which subsection (e)(3)(C) applies (without regard to
        clause (ii) thereof), and
          (B) which is made during the period beginning on the date of
        the enactment of this paragraph and before January 1, 2009,

      shall be treated for purposes of paragraph (1)(E) or (2)(B),
      whichever is applicable, as if it were a qualified conservation
      contribution which is made by a qualified farmer or rancher and
      which otherwise meets the requirements of such paragraph.
    (c) Charitable contribution defined
      For purposes of this section, the term "charitable contribution"
    means a contribution or gift to or for the use of - 
        (1) A State, a possession of the United States, or any
      political subdivision of any of the foregoing, or the United
      States or the District of Columbia, but only if the contribution
      or gift is made for exclusively public purposes.
        (2) A corporation, trust, or community chest, fund, or
      foundation - 
          (A) created or organized in the United States or in any
        possession thereof, or under the law of the United States, any
        State, the District of Columbia, or any possession of the
        United States;
          (B) organized and operated exclusively for religious,
        charitable, scientific, literary, or educational purposes, or
        to foster national or international amateur sports competition
        (but only if no part of its activities involve the provision of
        athletic facilities or equipment), or for the prevention of
        cruelty to children or animals;
          (C) no part of the net earnings of which inures to the
        benefit of any private shareholder or individual; and
          (D) which is not disqualified for tax exemption under section
        501(c)(3) by reason of attempting to influence legislation, and
        which does not participate in, or intervene in (including the
        publishing or distributing of statements), any political
        campaign on behalf of (or in opposition to) any candidate for
        public office.

      A contribution or gift by a corporation to a trust, chest, fund,
      or foundation shall be deductible by reason of this paragraph
      only if it is to be used within the United States or any of its
      possessions exclusively for purposes specified in subparagraph
      (B). Rules similar to the rules of section 501(j) shall apply for
      purposes of this paragraph.
        (3) A post or organization of war veterans, or an auxiliary
      unit or society of, or trust or foundation for, any such post or
      organization - 
          (A) organized in the United States or any of its possessions,
        and
          (B) no part of the net earnings of which inures to the
        benefit of any private shareholder or individual.

        (4) In the case of a contribution or gift by an individual, a
      domestic fraternal society, order, or association, operating
      under the lodge system, but only if such contribution or gift is
      to be used exclusively for religious, charitable, scientific,
      literary, or educational purposes, or for the prevention of
      cruelty to children or animals.
        (5) A cemetery company owned and operated exclusively for the
      benefit of its members, or any corporation chartered solely for
      burial purposes as a cemetery corporation and not permitted by
      its charter to engage in any business not necessarily incident to
      that purpose, if such company or corporation is not operated for
      profit and no part of the net earnings of such company or
      corporation inures to the benefit of any private shareholder or
      individual.

    For purposes of this section, the term "charitable contribution"
    also means an amount treated under subsection (g) as paid for the
    use of an organization described in paragraph (2), (3), or (4).
    (d) Carryovers of excess contributions
      (1) Individuals
        (A) In general
          In the case of an individual, if the amount of charitable
        contributions described in subsection (b)(1)(A) payment of
        which is made within a taxable year (hereinafter in this
        paragraph referred to as the "contribution year") exceeds 50
        percent of the taxpayer's contribution base for such year, such
        excess shall be treated as a charitable contribution described
        in subsection (b)(1)(A) paid in each of the 5 succeeding
        taxable years in order of time, but, with respect to any such
        succeeding taxable year, only to the extent of the lesser of
        the two following amounts:
            (i) the amount by which 50 percent of the taxpayer's
          contribution base for such succeeding taxable year exceeds
          the sum of the charitable contributions described in
          subsection (b)(1)(A) payment of which is made by the taxpayer
          within such succeeding taxable year (determined without
          regard to this subparagraph) and the charitable contributions
          described in subsection (b)(1)(A) payment of which was made
          in taxable years before the contribution year which are
          treated under this subparagraph as having been paid in such
          succeeding taxable year; or
            (ii) in the case of the first succeeding taxable year, the
          amount of such excess, and in the case of the second, third,
          fourth, or fifth succeeding taxable year, the portion of such
          excess not treated under this subparagraph as a charitable
          contribution described in subsection (b)(1)(A) paid in any
          taxable year intervening between the contribution year and
          such succeeding taxable year.
        (B) Special rule for net operating loss carryovers
          In applying subparagraph (A), the excess determined under
        subparagraph (A) for the contribution year shall be reduced to
        the extent that such excess reduces taxable income (as computed
        for purposes of the second sentence of section 172(b)(2)) and
        increases the net operating loss deduction for a taxable year
        succeeding the contribution year.
      (2) Corporations
        (A) In general
          Any contribution made by a corporation in a taxable year
        (hereinafter in this paragraph referred to as the "contribution
        year") in excess of the amount deductible for such year under
        subsection (b)(2)(A) shall be deductible for each of the 5
        succeeding taxable years in order of time, but only to the
        extent of the lesser of the two following amounts: (i) the
        excess of the maximum amount deductible for such succeeding
        taxable year under subsection (b)(2)(A) over the sum of the
        contributions made in such year plus the aggregate of the
        excess contributions which were made in taxable years before
        the contribution year and which are deductible under this
        subparagraph for such succeeding taxable year; or (ii) in the
        case of the first succeeding taxable year, the amount of such
        excess contribution, and in the case of the second, third,
        fourth, or fifth succeeding taxable year, the portion of such
        excess contribution not deductible under this subparagraph for
        any taxable year intervening between the contribution year and
        such succeeding taxable year.
        (B) Special rule for net operating loss carryovers
          For purposes of subparagraph (A), the excess of - 
            (i) the contributions made by a corporation in a taxable
          year to which this section applies, over
            (ii) the amount deductible in such year under the
          limitation in subsection (b)(2)(A),

        shall be reduced to the extent that such excess reduces taxable
        income (as computed for purposes of the second sentence of
        section 172(b)(2)) and increases a net operating loss carryover
        under section 172 to a succeeding taxable year.
    (e) Certain contributions of ordinary income and capital gain
      property
      (1) General rule
        The amount of any charitable contribution of property otherwise
      taken into account under this section shall be reduced by the sum
      of - 
          (A) the amount of gain which would not have been long-term
        capital gain (determined without regard to section 1221(b)(3))
        if the property contributed had been sold by the taxpayer at
        its fair market value (determined at the time of such
        contribution), and
          (B) in the case of a charitable contribution - 
            (i) of tangible personal property - 
              (I) if the use by the donee is unrelated to the purpose
            or function constituting the basis for its exemption under
            section 501 (or, in the case of a governmental unit, to any
            purpose or function described in subsection (c)), or
              (II) which is applicable property (as defined in
            paragraph (7)(C), but without regard to clause (ii)
            thereof) which is sold, exchanged, or otherwise disposed of
            by the donee before the last day of the taxable year in
            which the contribution was made and with respect to which
            the donee has not made a certification in accordance with
            paragraph (7)(D),

            (ii) to or for the use of a private foundation (as defined
          in section 509(a)), other than a private foundation described
          in subsection (b)(1)(F),
            (iii) of any patent, copyright (other than a copyright
          described in section 1221(a)(3) or 1231(b)(1)(C)), trademark,
          trade name, trade secret, know-how, software (other than
          software described in section 197(e)(3)(A)(i)), or similar
          property, or applications or registrations of such property,
          or
            (iv) of any taxidermy property which is contributed by the
          person who prepared, stuffed, or mounted the property or by
          any person who paid or incurred the cost of such preparation,
          stuffing, or mounting,

        the amount of gain which would have been long-term capital gain
        if the property contributed had been sold by the taxpayer at
        its fair market value (determined at the time of such
        contribution).

      For purposes of applying this paragraph (other than in the case
      of gain to which section 617(d)(1), 1245(a), 1250(a), 1252(a), or
      1254(a) applies), property which is property used in the trade or
      business (as defined in section 1231(b)) shall be treated as a
      capital asset. For purposes of applying this paragraph in the
      case of a charitable contribution of stock in an S corporation,
      rules similar to the rules of section 751 shall apply in
      determining whether gain on such stock would have been long-term
      capital gain if such stock were sold by the taxpayer.
      (2) Allocation of basis
        For purposes of paragraph (1), in the case of a charitable
      contribution of less than the taxpayer's entire interest in the
      property contributed, the taxpayer's adjusted basis in such
      property shall be allocated between the interest contributed and
      any interest not contributed in accordance with regulations
      prescribed by the Secretary.
      (3) Special rule for certain contributions of inventory and other
        property
        (A) Qualified contributions
          For purposes of this paragraph, a qualified contribution
        shall mean a charitable contribution of property described in
        paragraph (1) or (2) of section 1221(a), by a corporation
        (other than a corporation which is an S corporation) to an
        organization which is described in section 501(c)(3) and is
        exempt under section 501(a) (other than a private foundation,
        as defined in section 509(a), which is not an operating
        foundation, as defined in section 4942(j)(3)), but only if - 
            (i) the use of the property by the donee is related to the
          purpose or function constituting the basis for its exemption
          under section 501 and the property is to be used by the donee
          solely for the care of the ill, the needy, or infants;
            (ii) the property is not transferred by the donee in
          exchange for money, other property, or services;
            (iii) the taxpayer receives from the donee a written
          statement representing that its use and disposition of the
          property will be in accordance with the provisions of clauses
          (i) and (ii); and
            (iv) in the case where the property is subject to
          regulation under the Federal Food, Drug, and Cosmetic Act, as
          amended, such property must fully satisfy the applicable
          requirements of such Act and regulations promulgated
          thereunder on the date of transfer and for one hundred and
          eighty days prior thereto.
        (B) Amount of reduction
          The reduction under paragraph (1)(A) for any qualified
        contribution (as defined in subparagraph (A)) shall be no
        greater than the sum of - 
            (i) one-half of the amount computed under paragraph (1)(A)
          (computed without regard to this paragraph), and
            (ii) the amount (if any) by which the charitable
          contribution deduction under this section for any qualified
          contribution (computed by taking into account the amount
          determined in clause (i), but without regard to this clause)
          exceeds twice the basis of such property.
        (C) Special rule for contributions of food inventory
          (i) General rule
            In the case of a charitable contribution of food from any
          trade or business of the taxpayer, this paragraph shall be
          applied - 
              (I) without regard to whether the contribution is made by
            a C corporation, and
              (II) only to food that is apparently wholesome food.
          (ii) Limitation
            In the case of a taxpayer other than a C corporation, the
          aggregate amount of such contributions for any taxable year
          which may be taken into account under this section shall not
          exceed 10 percent of the taxpayer's aggregate net income for
          such taxable year from all trades or businesses from which
          such contributions were made for such year, computed without
          regard to this section.
          (iii) Apparently wholesome food
            For purposes of this subparagraph, the term "apparently
          wholesome food" has the meaning given to such term by section
          22(b)(2) of the Bill Emerson Good Samaritan Food Donation Act
          (42 U.S.C. 1791(b)(2)), as in effect on the date of the
          enactment of this subparagraph.
          (iv) Termination
            This subparagraph shall not apply to contributions made
          after December 31, 2011.
        (D) Special rule for contributions of book inventory to public
          schools
          (i) Contributions of book inventory
            In determining whether a qualified book contribution is a
          qualified contribution, subparagraph (A) shall be applied
          without regard to whether the donee is an organization
          described in the matter preceding clause (i) of subparagraph
          (A).
          (ii) Qualified book contribution
            For purposes of this paragraph, the term "qualified book
          contribution" means a charitable contribution of books to a
          public school which is an educational organization described
          in subsection (b)(1)(A)(ii) and which provides elementary
          education or secondary education (kindergarten through grade
          12).
          (iii) Certification by donee
            Subparagraph (A) shall not apply to any contribution of
          books unless (in addition to the certifications required by
          subparagraph (A) (as modified by this subparagraph)), the
          donee certifies in writing that - 
              (I) the books are suitable, in terms of currency,
            content, and quantity, for use in the donee's educational
            programs, and
              (II) the donee will use the books in its educational
            programs.
          (iv) Termination
            This subparagraph shall not apply to contributions made
          after December 31, 2011.

          (E) This paragraph shall not apply to so much of the amount
        of the gain described in paragraph (1)(A) which would be long-
        term capital gain but for the application of sections 617,
        1245, 1250, or 1252.
      (4) Special rule for contributions of scientific property used
        for research
        (A) Limit on reduction
          In the case of a qualified research contribution, the
        reduction under paragraph (1)(A) shall be no greater than the
        amount determined under paragraph (3)(B).
        (B) Qualified research contributions
          For purposes of this paragraph, the term "qualified research
        contribution" means a charitable contribution by a corporation
        of tangible personal property described in paragraph (1) of
        section 1221(a), but only if - 
            (i) the contribution is to an organization described in
          subparagraph (A) or subparagraph (B) of section 41(e)(6),
            (ii) the property is constructed or assembled by the
          taxpayer,
            (iii) the contribution is made not later than 2 years after
          the date the construction or assembly of the property is
          substantially completed,
            (iv) the original use of the property is by the donee,
            (v) the property is scientific equipment or apparatus
          substantially all of the use of which by the donee is for
          research or experimentation (within the meaning of section
          174), or for research training, in the United States in
          physical or biological sciences,
            (vi) the property is not transferred by the donee in
          exchange for money, other property, or services, and
            (vii) the taxpayer receives from the donee a written
          statement representing that its use and disposition of the
          property will be in accordance with the provisions of clauses
          (v) and (vi).
        (C) Construction of property by taxpayer
          For purposes of this paragraph, property shall be treated as
        constructed by the taxpayer only if the cost of the parts used
        in the construction of such property (other than parts
        manufactured by the taxpayer or a related person) do not exceed
        50 percent of the taxpayer's basis in such property.
        (D) Corporation
          For purposes of this paragraph, the term "corporation" shall
        not include - 
            (i) an S corporation,
            (ii) a personal holding company (as defined in section
          542), and
            (iii) a service organization (as defined in section
          414(m)(3)).
      (5) Special rule for contributions of stock for which market
        quotations are readily available
        (A) In general
          Subparagraph (B)(ii) of paragraph (1) shall not apply to any
        contribution of qualified appreciated stock.
        (B) Qualified appreciated stock
          Except as provided in subparagraph (C), for purposes of this
        paragraph, the term "qualified appreciated stock" means any
        stock of a corporation - 
            (i) for which (as of the date of the contribution) market
          quotations are readily available on an established securities
          market, and
            (ii) which is capital gain property (as defined in
          subsection (b)(1)(C)(iv)).
        (C) Donor may not contribute more than 10 percent of stock of
          corporation
          (i) In general
            In the case of any donor, the term "qualified appreciated
          stock" shall not include any stock of a corporation
          contributed by the donor in a contribution to which paragraph
          (1)(B)(ii) applies (determined without regard to this
          paragraph) to the extent that the amount of the stock so
          contributed (when increased by the aggregate amount of all
          prior such contributions by the donor of stock in such
          corporation) exceeds 10 percent (in value) of all of the
          outstanding stock of such corporation.
          (ii) Special rule
            For purposes of clause (i), an individual shall be treated
          as making all contributions made by any member of his family
          (as defined in section 267(c)(4)).
      (6) Special rule for contributions of computer technology and
        equipment for educational purposes
        (A) Limit on reduction
          In the case of a qualified computer contribution, the
        reduction under paragraph (1)(A) shall be no greater than the
        amount determined under paragraph (3)(B).
        (B) Qualified computer contribution
          For purposes of this paragraph, the term "qualified computer
        contribution" means a charitable contribution by a corporation
        of any computer technology or equipment, but only if - 
            (i) the contribution is to - 
              (I) an educational organization described in subsection
            (b)(1)(A)(ii),
              (II) an entity described in section 501(c)(3) and exempt
            from tax under section 501(a) (other than an entity
            described in subclause (I)) that is organized primarily for
            purposes of supporting elementary and secondary education,
            or
              (III) a public library (within the meaning of section
            213(1)(A) of the Library Services and Technology Act (20
            U.S.C. 9122(1)(A))),(!1) as in effect on the date of the
            enactment of the Community Renewal Tax Relief Act of 2000),
            established and maintained by an entity described in
            subsection (c)(1),


            (ii) the contribution is made not later than 3 years after
          the date the taxpayer acquired the property (or in the case
          of property constructed or assembled by the taxpayer, the
          date the construction or assembling of the property is
          substantially completed),
            (iii) the original use of the property is by the donor or
          the donee,
            (iv) substantially all of the use of the property by the
          donee is for use within the United States for educational
          purposes that are related to the purpose or function of the
          donee,
            (v) the property is not transferred by the donee in
          exchange for money, other property, or services, except for
          shipping, installation and transfer costs,
            (vi) the property will fit productively into the donee's
          education plan,
            (vii) the donee's use and disposition of the property will
          be in accordance with the provisions of clauses (iv) and (v),
          and
            (viii) the property meets such standards, if any, as the
          Secretary may prescribe by regulation to assure that the
          property meets minimum functionality and suitability
          standards for educational purposes.
        (C) Contribution to private foundation
          A contribution by a corporation of any computer technology or
        equipment to a private foundation (as defined in section 509)
        shall be treated as a qualified computer contribution for
        purposes of this paragraph if - 
            (i) the contribution to the private foundation satisfies
          the requirements of clauses (ii) and (v) of subparagraph (B),
          and
            (ii) within 30 days after such contribution, the private
          foundation - 
              (I) contributes the property to a donee described in
            clause (i) of subparagraph (B) that satisfies the
            requirements of clauses (iv) through (vii) of subparagraph
            (B), and
              (II) notifies the donor of such contribution.
        (D) Donations of property reacquired by manufacturer
          In the case of property which is reacquired by the person who
        constructed or assembled the property - 
            (i) subparagraph (B)(ii) shall be applied to a contribution
          of such property by such person by taking into account the
          date that the original construction or assembly of the
          property was substantially completed, and
            (ii) subparagraph (B)(iii) shall not apply to such
          contribution.
        (E) Special rule relating to construction of property
          For the purposes of this paragraph, the rules of paragraph
        (4)(C) shall apply.
        (F) Definitions
          For the purposes of this paragraph - 
          (i) Computer technology or equipment
            The term "computer technology or equipment" means computer
          software (as defined by section 197(e)(3)(B)), computer or
          peripheral equipment (as defined by section 168(i)(2)(B)),
          and fiber optic cable related to computer use.
          (ii) Corporation
            The term "corporation" has the meaning given to such term
          by paragraph (4)(D).
        (G) Termination
          This paragraph shall not apply to any contribution made
        during any taxable year beginning after December 31, 2011.
      (7) Recapture of deduction on certain dispositions of exempt use
        property
        (A) In general
          In the case of an applicable disposition of applicable
        property, there shall be included in the income of the donor of
        such property for the taxable year of such donor in which the
        applicable disposition occurs an amount equal to the excess (if
        any) of - 
            (i) the amount of the deduction allowed to the donor under
          this section with respect to such property, over
            (ii) the donor's basis in such property at the time such
          property was contributed.
        (B) Applicable disposition
          For purposes of this paragraph, the term "applicable
        disposition" means any sale, exchange, or other disposition by
        the donee of applicable property - 
            (i) after the last day of the taxable year of the donor in
          which such property was contributed, and
            (ii) before the last day of the 3-year period beginning on
          the date of the contribution of such property,

        unless the donee makes a certification in accordance with
        subparagraph (D).
        (C) Applicable property
          For purposes of this paragraph, the term "applicable
        property" means charitable deduction property (as defined in
        section 6050L(a)(2)(A)) - 
            (i) which is tangible personal property the use of which is
          identified by the donee as related to the purpose or function
          constituting the basis of the donee's exemption under section
          501, and
            (ii) for which a deduction in excess of the donor's basis
          is allowed.
        (D) Certification
          A certification meets the requirements of this subparagraph
        if it is a written statement which is signed under penalty of
        perjury by an officer of the donee organization and - 
            (i) which - 
              (I) certifies that the use of the property by the donee
            was substantial and related to the purpose or function
            constituting the basis for the donee's exemption under
            section 501, and
              (II) describes how the property was used and how such use
            furthered such purpose or function, or

            (ii) which - 
              (I) states the intended use of the property by the donee
            at the time of the contribution, and
              (II) certifies that such intended use has become
            impossible or infeasible to implement.
    (f) Disallowance of deduction in certain cases and special rules
      (1) In general
        No deduction shall be allowed under this section for a
      contribution to or for the use of an organization or trust
      described in section 508(d) or 4948(c)(4) subject to the
      conditions specified in such sections.
      (2) Contributions of property placed in trust
        (A) Remainder interest
          In the case of property transferred in trust, no deduction
        shall be allowed under this section for the value of a
        contribution of a remainder interest unless the trust is a
        charitable remainder annuity trust or a charitable remainder
        unitrust (described in section 664), or a pooled income fund
        (described in section 642(c)(5)).
        (B) Income interests, etc.
          No deduction shall be allowed under this section for the
        value of any interest in property (other than a remainder
        interest) transferred in trust unless the interest is in the
        form of a guaranteed annuity or the trust instrument specifies
        that the interest is a fixed percentage distributed yearly of
        the fair market value of the trust property (to be determined
        yearly) and the grantor is treated as the owner of such
        interest for purposes of applying section 671. If the donor
        ceases to be treated as the owner of such an interest for
        purposes of applying section 671, at the time the donor ceases
        to be so treated, the donor shall for purposes of this chapter
        be considered as having received an amount of income equal to
        the amount of any deduction he received under this section for
        the contribution reduced by the discounted value of all amounts
        of income earned by the trust and taxable to him before the
        time at which he ceases to be treated as the owner of the
        interest. Such amounts of income shall be discounted to the
        date of the contribution. The Secretary shall prescribe such
        regulations as may be necessary to carry out the purposes of
        this subparagraph.
        (C) Denial of deduction in case of payments by certain trusts
          In any case in which a deduction is allowed under this
        section for the value of an interest in property described in
        subparagraph (B), transferred in trust, no deduction shall be
        allowed under this section to the grantor or any other person
        for the amount of any contribution made by the trust with
        respect to such interest.
        (D) Exception
          This paragraph shall not apply in a case in which the value
        of all interests in property transferred in trust are
        deductible under subsection (a).
      (3) Denial of deduction in case of certain contributions of
        partial interests in property
        (A) In general
          In the case of a contribution (not made by a transfer in
        trust) of an interest in property which consists of less than
        the taxpayer's entire interest in such property, a deduction
        shall be allowed under this section only to the extent that the
        value of the interest contributed would be allowable as a
        deduction under this section if such interest had been
        transferred in trust. For purposes of this subparagraph, a
        contribution by a taxpayer of the right to use property shall
        be treated as a contribution of less than the taxpayer's entire
        interest in such property.
        (B) Exceptions
          Subparagraph (A) shall not apply to - 
            (i) a contribution of a remainder interest in a personal
          residence or farm,
            (ii) a contribution of an undivided portion of the
          taxpayer's entire interest in property, and
            (iii) a qualified conservation contribution.
      (4) Valuation of remainder interest in real property
        For purposes of this section, in determining the value of a
      remainder interest in real property, depreciation (computed on
      the straight line method) and depletion of such property shall be
      taken into account, and such value shall be discounted at a rate
      of 6 percent per annum, except that the Secretary may prescribe a
      different rate.
      (5) Reduction for certain interest
        If, in connection with any charitable contribution, a liability
      is assumed by the recipient or by any other person, or if a
      charitable contribution is of property which is subject to a
      liability, then, to the extent necessary to avoid the duplication
      of amounts, the amount taken into account for purposes of this
      section as the amount of the charitable contribution - 
          (A) shall be reduced for interest (i) which has been paid (or
        is to be paid) by the taxpayer, (ii) which is attributable to
        the liability, and (iii) which is attributable to any period
        after the making of the contribution, and
          (B) in the case of a bond, shall be further reduced for
        interest (i) which has been paid (or is to be paid) by the
        taxpayer on indebtedness incurred or continued to purchase or
        carry such bond, and (ii) which is attributable to any period
        before the making of the contribution.

      The reduction pursuant to subparagraph (B) shall not exceed the
      interest (including interest equivalent) on the bond which is
      attributable to any period before the making of the contribution
      and which is not (under the taxpayer's method of accounting)
      includible in the gross income of the taxpayer for any taxable
      year. For purposes of this paragraph, the term "bond" means any
      bond, debenture, note, or certificate or other evidence of
      indebtedness.
      (6) Deductions for out-of-pocket expenditures
        No deduction shall be allowed under this section for an out-of-
      pocket expenditure made by any person on behalf of an
      organization described in subsection (c) (other than an
      organization described in section 501(h)(5) (relating to
      churches, etc.)) if the expenditure is made for the purpose of
      influencing legislation (within the meaning of section
      501(c)(3)).
      (7) Reformations to comply with paragraph (2)
        (A) In general
          A deduction shall be allowed under subsection (a) in respect
        of any qualified reformation (within the meaning of section
        2055(e)(3)(B)).
        (B) Rules similar to section 2055(e)(3) to apply
          For purposes of this paragraph, rules similar to the rules of
        section 2055(e)(3) shall apply.
      (8) Substantiation requirement for certain contributions
        (A) General rule
          No deduction shall be allowed under subsection (a) for any
        contribution of $250 or more unless the taxpayer substantiates
        the contribution by a contemporaneous written acknowledgment of
        the contribution by the donee organization that meets the
        requirements of subparagraph (B).
        (B) Content of acknowledgement
          An acknowledgement meets the requirements of this
        subparagraph if it includes the following information:
            (i) The amount of cash and a description (but not value) of
          any property other than cash contributed.
            (ii) Whether the donee organization provided any goods or
          services in consideration, in whole or in part, for any
          property described in clause (i).
            (iii) A description and good faith estimate of the value of
          any goods or services referred to in clause (ii) or, if such
          goods or services consist solely of intangible religious
          benefits, a statement to that effect.

        For purposes of this subparagraph, the term "intangible
        religious benefit" means any intangible religious benefit which
        is provided by an organization organized exclusively for
        religious purposes and which generally is not sold in a
        commercial transaction outside the donative context.
        (C) Contemporaneous
          For purposes of subparagraph (A), an acknowledgment shall be
        considered to be contemporaneous if the taxpayer obtains the
        acknowledgment on or before the earlier of - 
            (i) the date on which the taxpayer files a return for the
          taxable year in which the contribution was made, or
            (ii) the due date (including extensions) for filing such
          return.
        (D) Substantiation not required for contributions reported by
          the donee organization
          Subparagraph (A) shall not apply to a contribution if the
        donee organization files a return, on such form and in
        accordance with such regulations as the Secretary may
        prescribe, which includes the information described in
        subparagraph (B) with respect to the contribution.
        (E) Regulations
          The Secretary shall prescribe such regulations as may be
        necessary or appropriate to carry out the purposes of this
        paragraph, including regulations that may provide that some or
        all of the requirements of this paragraph do not apply in
        appropriate cases.
      (9) Denial of deduction where contribution for lobbying
        activities
        No deduction shall be allowed under this section for a
      contribution to an organization which conducts activities to
      which section 162(e)(1) applies on matters of direct financial
      interest to the donor's trade or business, if a principal purpose
      of the contribution was to avoid Federal income tax by securing a
      deduction for such activities under this section which would be
      disallowed by reason of section 162(e) if the donor had conducted
      such activities directly. No deduction shall be allowed under
      section 162(a) for any amount for which a deduction is disallowed
      under the preceding sentence.
      (10) Split-dollar life insurance, annuity, and endowment
        contracts
        (A) In general
          Nothing in this section or in section 545(b)(2), 642(c),
        2055, 2106(a)(2), or 2522 shall be construed to allow a
        deduction, and no deduction shall be allowed, for any transfer
        to or for the use of an organization described in subsection
        (c) if in connection with such transfer - 
            (i) the organization directly or indirectly pays, or has
          previously paid, any premium on any personal benefit contract
          with respect to the transferor, or
            (ii) there is an understanding or expectation that any
          person will directly or indirectly pay any premium on any
          personal benefit contract with respect to the transferor.
        (B) Personal benefit contract
          For purposes of subparagraph (A), the term "personal benefit
        contract" means, with respect to the transferor, any life
        insurance, annuity, or endowment contract if any direct or
        indirect beneficiary under such contract is the transferor, any
        member of the transferor's family, or any other person (other
        than an organization described in subsection (c)) designated by
        the transferor.
        (C) Application to charitable remainder trusts
          In the case of a transfer to a trust referred to in
        subparagraph (E), references in subparagraphs (A) and (F) to an
        organization described in subsection (c) shall be treated as a
        reference to such trust.
        (D) Exception for certain annuity contracts
          If, in connection with a transfer to or for the use of an
        organization described in subsection (c), such organization
        incurs an obligation to pay a charitable gift annuity (as
        defined in section 501(m)) and such organization purchases any
        annuity contract to fund such obligation, persons receiving
        payments under the charitable gift annuity shall not be treated
        for purposes of subparagraph (B) as indirect beneficiaries
        under such contract if - 
            (i) such organization possesses all of the incidents of
          ownership under such contract,
            (ii) such organization is entitled to all the payments
          under such contract, and
            (iii) the timing and amount of payments under such contract
          are substantially the same as the timing and amount of
          payments to each such person under such obligation (as such
          obligation is in effect at the time of such transfer).
        (E) Exception for certain contracts held by charitable
          remainder trusts
          A person shall not be treated for purposes of subparagraph
        (B) as an indirect beneficiary under any life insurance,
        annuity, or endowment contract held by a charitable remainder
        annuity trust or a charitable remainder unitrust (as defined in
        section 664(d)) solely by reason of being entitled to any
        payment referred to in paragraph (1)(A) or (2)(A) of section
        664(d) if - 
            (i) such trust possesses all of the incidents of ownership
          under such contract, and
            (ii) such trust is entitled to all the payments under such
          contract.
        (F) Excise tax on premiums paid
          (i) In general
            There is hereby imposed on any organization described in
          subsection (c) an excise tax equal to the premiums paid by
          such organization on any life insurance, annuity, or
          endowment contract if the payment of premiums on such
          contract is in connection with a transfer for which a
          deduction is not allowable under subparagraph (A), determined
          without regard to when such transfer is made.
          (ii) Payments by other persons
            For purposes of clause (i), payments made by any other
          person pursuant to an understanding or expectation referred
          to in subparagraph (A) shall be treated as made by the
          organization.
          (iii) Reporting
            Any organization on which tax is imposed by clause (i) with
          respect to any premium shall file an annual return which
          includes - 
              (I) the amount of such premiums paid during the year and
            the name and TIN of each beneficiary under the contract to
            which the premium relates, and
              (II) such other information as the Secretary may require.

          The penalties applicable to returns required under section
          6033 shall apply to returns required under this clause.
          Returns required under this clause shall be furnished at such
          time and in such manner as the Secretary shall by forms or
          regulations require.
          (iv) Certain rules to apply
            The tax imposed by this subparagraph shall be treated as
          imposed by chapter 42 for purposes of this title other than
          subchapter B of chapter 42.
        (G) Special rule where State requires specification of
          charitable gift annuitant in contract
          In the case of an obligation to pay a charitable gift annuity
        referred to in subparagraph (D) which is entered into under the
        laws of a State which requires, in order for the charitable
        gift annuity to be exempt from insurance regulation by such
        State, that each beneficiary under the charitable gift annuity
        be named as a beneficiary under an annuity contract issued by
        an insurance company authorized to transact business in such
        State, the requirements of clauses (i) and (ii) of subparagraph
        (D) shall be treated as met if - 
            (i) such State law requirement was in effect on February 8,
          1999,
            (ii) each such beneficiary under the charitable gift
          annuity is a bona fide resident of such State at the time the
          obligation to pay a charitable gift annuity is entered into,
          and
            (iii) the only persons entitled to payments under such
          contract are persons entitled to payments as beneficiaries
          under such obligation on the date such obligation is entered
          into.
        (H) Member of family
          For purposes of this paragraph, an individual's family
        consists of the individual's grandparents, the grandparents of
        such individual's spouse, the lineal descendants of such
        grandparents, and any spouse of such a lineal descendant.
        (I) Regulations
          The Secretary shall prescribe such regulations as may be
        necessary or appropriate to carry out the purposes of this
        paragraph, including regulations to prevent the avoidance of
        such purposes.
      (11) Qualified appraisal and other documentation for certain
        contributions
        (A) In general
          (i) Denial of deduction
            In the case of an individual, partnership, or corporation,
          no deduction shall be allowed under subsection (a) for any
          contribution of property for which a deduction of more than
          $500 is claimed unless such person meets the requirements of
          subparagraphs (B), (C), and (D), as the case may be, with
          respect to such contribution.
          (ii) Exceptions
            (I) Readily valued property
              Subparagraphs (C) and (D) shall not apply to cash,
            property described in subsection (e)(1)(B)(iii) or section
            1221(a)(1), publicly traded securities (as defined in
            section 6050L(a)(2)(B)), and any qualified vehicle
            described in paragraph (12)(A)(ii) for which an
            acknowledgement under paragraph (12)(B)(iii) is provided.
            (II) Reasonable cause
              Clause (i) shall not apply if it is shown that the
            failure to meet such requirements is due to reasonable
            cause and not to willful neglect.
        (B) Property description for contributions of more than $500
          In the case of contributions of property for which a
        deduction of more than $500 is claimed, the requirements of
        this subparagraph are met if the individual, partnership or
        corporation includes with the return for the taxable year in
        which the contribution is made a description of such property
        and such other information as the Secretary may require. The
        requirements of this subparagraph shall not apply to a C
        corporation which is not a personal service corporation or a
        closely held C corporation.
        (C) Qualified appraisal for contributions of more than $5,000
          In the case of contributions of property for which a
        deduction of more than $5,000 is claimed, the requirements of
        this subparagraph are met if the individual, partnership, or
        corporation obtains a qualified appraisal of such property and
        attaches to the return for the taxable year in which such
        contribution is made such information regarding such property
        and such appraisal as the Secretary may require.
        (D) Substantiation for contributions of more than $500,000
          In the case of contributions of property for which a
        deduction of more than $500,000 is claimed, the requirements of
        this subparagraph are met if the individual, partnership, or
        corporation attaches to the return for the taxable year a
        qualified appraisal of such property.
        (E) Qualified appraisal and appraiser
          For purposes of this paragraph - 
          (i) Qualified appraisal
            The term "qualified appraisal" means, with respect to any
          property, an appraisal of such property which - 
              (I) is treated for purposes of this paragraph as a
            qualified appraisal under regulations or other guidance
            prescribed by the Secretary, and
              (II) is conducted by a qualified appraiser in accordance
            with generally accepted appraisal standards and any
            regulations or other guidance prescribed under subclause
            (I).
          (ii) Qualified appraiser
            Except as provided in clause (iii), the term "qualified
          appraiser" means an individual who - 
              (I) has earned an appraisal designation from a recognized
            professional appraiser organization or has otherwise met
            minimum education and experience requirements set forth in
            regulations prescribed by the Secretary,
              (II) regularly performs appraisals for which the
            individual receives compensation, and
              (III) meets such other requirements as may be prescribed
            by the Secretary in regulations or other guidance.
          (iii) Specific appraisals
            An individual shall not be treated as a qualified appraiser
          with respect to any specific appraisal unless - 
              (I) the individual demonstrates verifiable education and
            experience in valuing the type of property subject to the
            appraisal, and
              (II) the individual has not been prohibited from
            practicing before the Internal Revenue Service by the
            Secretary under section 330(c) of title 31, United States
            Code, at any time during the 3-year period ending on the
            date of the appraisal.
        (F) Aggregation of similar items of property
          For purposes of determining thresholds under this paragraph,
        property and all similar items of property donated to 1 or more
        donees shall be treated as 1 property.
        (G) Special rule for pass-thru entities
          In the case of a partnership or S corporation, this paragraph
        shall be applied at the entity level, except that the deduction
        shall be denied at the partner or shareholder level.
        (H) Regulations
          The Secretary may prescribe such regulations as may be
        necessary or appropriate to carry out the purposes of this
        paragraph, including regulations that may provide that some or
        all of the requirements of this paragraph do not apply in
        appropriate cases.
      (12) Contributions of used motor vehicles, boats, and airplanes
        (A) In general
          In the case of a contribution of a qualified vehicle the
        claimed value of which exceeds $500 - 
            (i) paragraph (8) shall not apply and no deduction shall be
          allowed under subsection (a) for such contribution unless the
          taxpayer substantiates the contribution by a contemporaneous
          written acknowledgement of the contribution by the donee
          organization that meets the requirements of subparagraph (B)
          and includes the acknowledgement with the taxpayer's return
          of tax which includes the deduction, and
            (ii) if the organization sells the vehicle without any
          significant intervening use or material improvement of such
          vehicle by the organization, the amount of the deduction
          allowed under subsection (a) shall not exceed the gross
          proceeds received from such sale.
        (B) Content of acknowledgement
          An acknowledgement meets the requirements of this
        subparagraph if it includes the following information:
            (i) The name and taxpayer identification number of the
          donor.
            (ii) The vehicle identification number or similar number.
            (iii) In the case of a qualified vehicle to which
          subparagraph (A)(ii) applies - 
              (I) a certification that the vehicle was sold in an arm's
            length transaction between unrelated parties,
              (II) the gross proceeds from the sale, and
              (III) a statement that the deductible amount may not
            exceed the amount of such gross proceeds.

            (iv) In the case of a qualified vehicle to which
          subparagraph (A)(ii) does not apply - 
              (I) a certification of the intended use or material
            improvement of the vehicle and the intended duration of
            such use, and
              (II) a certification that the vehicle would not be
            transferred in exchange for money, other property, or
            services before completion of such use or improvement.

            (v) Whether the donee organization provided any goods or
          services in consideration, in whole or in part, for the
          qualified vehicle.
            (vi) A description and good faith estimate of the value of
          any goods or services referred to in clause (v) or, if such
          goods or services consist solely of intangible religious
          benefits (as defined in paragraph (8)(B)), a statement to
          that effect.
        (C) Contemporaneous
          For purposes of subparagraph (A), an acknowledgement shall be
        considered to be contemporaneous if the donee organization
        provides it within 30 days of - 
            (i) the sale of the qualified vehicle, or
            (ii) in the case of an acknowledgement including a
          certification described in subparagraph (B)(iv), the
          contribution of the qualified vehicle.
        (D) Information to Secretary
          A donee organization required to provide an acknowledgement
        under this paragraph shall provide to the Secretary the
        information contained in the acknowledgement. Such information
        shall be provided at such time and in such manner as the
        Secretary may prescribe.
        (E) Qualified vehicle
          For purposes of this paragraph, the term "qualified vehicle"
        means any - 
            (i) motor vehicle manufactured primarily for use on public
          streets, roads, and highways,
            (ii) boat, or
            (iii) airplane.

        Such term shall not include any property which is described in
        section 1221(a)(1).
        (F) Regulations or other guidance
          The Secretary shall prescribe such regulations or other
        guidance as may be necessary to carry out the purposes of this
        paragraph. The Secretary may prescribe regulations or other
        guidance which exempts sales by the donee organization which
        are in direct furtherance of such organization's charitable
        purpose from the requirements of subparagraphs (A)(ii) and
        (B)(iv)(II).
      (13) Contributions of certain interests in buildings located in
        registered historic districts
        (A) In general
          No deduction shall be allowed with respect to any
        contribution described in subparagraph (B) unless the taxpayer
        includes with the return for the taxable year of the
        contribution a $500 filing fee.
        (B) Contribution described
          A contribution is described in this subparagraph if such
        contribution is a qualified conservation contribution (as
        defined in subsection (h)) which is a restriction with respect
        to the exterior of a building described in subsection
        (h)(4)(C)(ii) and for which a deduction is claimed in excess of
        $10,000.
        (C) Dedication of fee
          Any fee collected under this paragraph shall be used for the
        enforcement of the provisions of subsection (h).
      (14) Reduction for amounts attributable to rehabilitation credit
        In the case of any qualified conservation contribution (as
      defined in subsection (h)), the amount of the deduction allowed
      under this section shall be reduced by an amount which bears the
      same ratio to the fair market value of the contribution as - 
          (A) the sum of the credits allowed to the taxpayer under
        section 47 for the 5 preceding taxable years with respect to
        any building which is a part of such contribution, bears to
          (B) the fair market value of the building on the date of the
        contribution.
      (15) Special rule for taxidermy property
        (A) Basis
          For purposes of this section and notwithstanding section
        1012, in the case of a charitable contribution of taxidermy
        property which is made by the person who prepared, stuffed, or
        mounted the property or by any person who paid or incurred the
        cost of such preparation, stuffing, or mounting, only the cost
        of the preparing, stuffing, or mounting shall be included in
        the basis of such property.
        (B) Taxidermy property
          For purposes of this section, the term "taxidermy property"
        means any work of art which - 
            (i) is the reproduction or preservation of an animal, in
          whole or in part,
            (ii) is prepared, stuffed, or mounted for purposes of
          recreating one or more characteristics of such animal, and
            (iii) contains a part of the body of the dead animal.
      (16) Contributions of clothing and household items
        (A) In general
          In the case of an individual, partnership, or corporation, no
        deduction shall be allowed under subsection (a) for any
        contribution of clothing or a household item unless such
        clothing or household item is in good used condition or better.
        (B) Items of minimal value
          Notwithstanding subparagraph (A), the Secretary may by
        regulation deny a deduction under subsection (a) for any
        contribution of clothing or a household item which has minimal
        monetary value.
        (C) Exception for certain property
          Subparagraphs (A) and (B) shall not apply to any contribution
        of a single item of clothing or a household item for which a
        deduction of more than $500 is claimed if the taxpayer includes
        with the taxpayer's return a qualified appraisal with respect
        to the property.
        (D) Household items
          For purposes of this paragraph - 
          (i) In general
            The term "household items" includes furniture, furnishings,
          electronics, appliances, linens, and other similar items.
          (ii) Excluded items
            Such term does not include - 
              (I) food,
              (II) paintings, antiques, and other objects of art,
              (III) jewelry and gems, and
              (IV) collections.
        (E) Special rule for pass-thru entities
          In the case of a partnership or S corporation, this paragraph
        shall be applied at the entity level, except that the deduction
        shall be denied at the partner or shareholder level.
      (17) Recordkeeping
        No deduction shall be allowed under subsection (a) for any
      contribution of a cash, check, or other monetary gift unless the
      donor maintains as a record of such contribution a bank record or
      a written communication from the donee showing the name of the
      donee organization, the date of the contribution, and the amount
      of the contribution.
      (18) Contributions to donor advised funds
        A deduction otherwise allowed under subsection (a) for any
      contribution to a donor advised fund (as defined in section
      4966(d)(2)) shall only be allowed if - 
          (A) the sponsoring organization (as defined in section
        4966(d)(1)) with respect to such donor advised fund is not - 
            (i) described in paragraph (3), (4), or (5) of subsection
          (c), or
            (ii) a type III supporting organization (as defined in
          section 4943(f)(5)(A)) which is not a functionally integrated
          type III supporting organization (as defined in section
          4943(f)(5)(B)), and

          (B) the taxpayer obtains a contemporaneous written
        acknowledgment (determined under rules similar to the rules of
        paragraph (8)(C)) from the sponsoring organization (as so
        defined) of such donor advised fund that such organization has
        exclusive legal control over the assets contributed.
    (g) Amounts paid to maintain certain students as members of
      taxpayer's household
      (1) In general
        Subject to the limitations provided by paragraph (2), amounts
      paid by the taxpayer to maintain an individual (other than a
      dependent, as defined in section 152 (determined without regard
      to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), or a
      relative of the taxpayer) as a member of his household during the
      period that such individual is - 
          (A) a member of the taxpayer's household under a written
        agreement between the taxpayer and an organization described in
        paragraph (2), (3), or (4) of subsection (c) to implement a
        program of the organization to provide educational
        opportunities for pupils or students in private homes, and
          (B) a full-time pupil or student in the twelfth or any lower
        grade at an educational organization described in section
        170(b)(1)(A)(ii) located in the United States,

      shall be treated as amounts paid for the use of the organization.
      (2) Limitations
        (A) Amount
          Paragraph (1) shall apply to amounts paid within the taxable
        year only to the extent that such amounts do not exceed $50
        multiplied by the number of full calendar months during the
        taxable year which fall within the period described in
        paragraph (1). For purposes of the preceding sentence, if 15 or
        more days of a calendar month fall within such period such
        month shall be considered as a full calendar month.
        (B) Compensation or reimbursement
          Paragraph (1) shall not apply to any amount paid by the
        taxpayer within the taxable year if the taxpayer receives any
        money or other property as compensation or reimbursement for
        maintaining the individual in his household during the period
        described in paragraph (1).
      (3) Relative defined
        For purposes of paragraph (1), the term "relative of the
      taxpayer" means an individual who, with respect to the taxpayer,
      bears any of the relationships described in subparagraphs (A)
      through (G) of section 152(d)(2).
      (4) No other amount allowed as deduction
        No deduction shall be allowed under subsection (a) for any
      amount paid by a taxpayer to maintain an individual as a member
      of his household under a program described in paragraph (1)(A)
      except as provided in this subsection.
    (h) Qualified conservation contribution
      (1) In general
        For purposes of subsection (f)(3)(B)(iii), the term "qualified
      conservation contribution" means a contribution - 
          (A) of a qualified real property interest,
          (B) to a qualified organization,
          (C) exclusively for conservation purposes.
      (2) Qualified real property interest
        For purposes of this subsection, the term "qualified real
      property interest" means any of the following interests in real
      property:
          (A) the entire interest of the donor other than a qualified
        mineral interest,
          (B) a remainder interest, and
          (C) a restriction (granted in perpetuity) on the use which
        may be made of the real property.
      (3) Qualified organization
        For purposes of paragraph (1), the term "qualified
      organization" means an organization which - 
          (A) is described in clause (v) or (vi) of subsection
        (b)(1)(A), or
          (B) is described in section 501(c)(3) and - 
            (i) meets the requirements of section 509(a)(2), or
            (ii) meets the requirements of section 509(a)(3) and is
          controlled by an organization described in subparagraph (A)
          or in clause (i) of this subparagraph.
      (4) Conservation purpose defined
        (A) In general
          For purposes of this subsection, the term "conservation
        purpose" means - 
            (i) the preservation of land areas for outdoor recreation
          by, or the education of, the general public,
            (ii) the protection of a relatively natural habitat of
          fish, wildlife, or plants, or similar ecosystem,
            (iii) the preservation of open space (including farmland
          and forest land) where such preservation is - 
              (I) for the scenic enjoyment of the general public, or
              (II) pursuant to a clearly delineated Federal, State, or
            local governmental conservation policy,

          and will yield a significant public benefit, or
            (iv) the preservation of an historically important land
          area or a certified historic structure.
        (B) Special rules with respect to buildings in registered
          historic districts
          In the case of any contribution of a qualified real property
        interest which is a restriction with respect to the exterior of
        a building described in subparagraph (C)(ii), such contribution
        shall not be considered to be exclusively for conservation
        purposes unless - 
            (i) such interest - 
              (I) includes a restriction which preserves the entire
            exterior of the building (including the front, sides, rear,
            and height of the building), and
              (II) prohibits any change in the exterior of the building
            which is inconsistent with the historical character of such
            exterior,

            (ii) the donor and donee enter into a written agreement
          certifying, under penalty of perjury, that the donee - 
              (I) is a qualified organization (as defined in paragraph
            (3)) with a purpose of environmental protection, land
            conservation, open space preservation, or historic
            preservation, and
              (II) has the resources to manage and enforce the
            restriction and a commitment to do so, and

            (iii) in the case of any contribution made in a taxable
          year beginning after the date of the enactment of this
          subparagraph, the taxpayer includes with the taxpayer's
          return for the taxable year of the contribution - 
              (I) a qualified appraisal (within the meaning of
            subsection (f)(11)(E)) of the qualified property interest,
              (II) photographs of the entire exterior of the building,
            and
              (III) a description of all restrictions on the
            development of the building.
        (C) Certified historic structure
          For purposes of subparagraph (A)(iv), the term "certified
        historic structure" means - 
            (i) any building, structure, or land area which is listed
          in the National Register, or
            (ii) any building which is located in a registered historic
          district (as defined in section 47(c)(3)(B)) and is certified
          by the Secretary of the Interior to the Secretary as being of
          historic significance to the district.

      A building, structure, or land area satisfies the preceding
      sentence if it satisfies such sentence either at the time of the
      transfer or on the due date (including extensions) for filing the
      transferor's return under this chapter for the taxable year in
      which the transfer is made.
      (5) Exclusively for conservation purposes
        For purposes of this subsection - 
        (A) Conservation purpose must be protected
          A contribution shall not be treated as exclusively for
        conservation purposes unless the conservation purpose is
        protected in perpetuity.
        (B) No surface mining permitted
          (i) In general
            Except as provided in clause (ii), in the case of a
          contribution of any interest where there is a retention of a
          qualified mineral interest, subparagraph (A) shall not be
          treated as met if at any time there may be extraction or
          removal of minerals by any surface mining method.
          (ii) Special rule
            With respect to any contribution of property in which the
          ownership of the surface estate and mineral interests has
          been and remains separated, subparagraph (A) shall be treated
          as met if the probability of surface mining occurring on such
          property is so remote as to be negligible.
      (6) Qualified mineral interest
        For purposes of this subsection, the term "qualified mineral
      interest" means - 
          (A) subsurface oil, gas, or other minerals, and
          (B) the right to access to such minerals.
    (i) Standard mileage rate for use of passenger automobile
      For purposes of computing the deduction under this section for
    use of a passenger automobile, the standard mileage rate shall be
    14 cents per mile.
    (j) Denial of deduction for certain travel expenses
      No deduction shall be allowed under this section for traveling
    expenses (including amounts expended for meals and lodging) while
    away from home, whether paid directly or by reimbursement, unless
    there is no significant element of personal pleasure, recreation,
    or vacation in such travel.
    (k) Disallowance of deductions in certain cases
          For disallowance of deductions for contributions to or for
        the use of communist controlled organizations, see section
        11(a) (!2) of the Internal Security Act of 1950 (50 U.S.C.
        790).

    (l) Treatment of certain amounts paid to or for the benefit of
      institutions of higher education
      (1) In general
        For purposes of this section, 80 percent of any amount
      described in paragraph (2) shall be treated as a charitable
      contribution.
      (2) Amount described
        For purposes of paragraph (1), an amount is described in this
      paragraph if - 
          (A) the amount is paid by the taxpayer to or for the benefit
        of an educational organization - 
            (i) which is described in subsection (b)(1)(A)(ii), and
            (ii) which is an institution of higher education (as
          defined in section 3304(f)), and

          (B) such amount would be allowable as a deduction under this
        section but for the fact that the taxpayer receives (directly
        or indirectly) as a result of paying such amount the right to
        purchase tickets for seating at an athletic event in an
        athletic stadium of such institution.

      If any portion of a payment is for the purchase of such tickets,
      such portion and the remaining portion (if any) of such payment
      shall be treated as separate amounts for purposes of this
      subsection.
    (m) Certain donee income from intellectual property treated as an
      additional charitable contribution
      (1) Treatment as additional contribution
        In the case of a taxpayer who makes a qualified intellectual
      property contribution, the deduction allowed under subsection (a)
      for each taxable year of the taxpayer ending on or after the date
      of such contribution shall be increased (subject to the
      limitations under subsection (b)) by the applicable percentage of
      qualified donee income with respect to such contribution which is
      properly allocable to such year under this subsection.
      (2) Reduction in additional deductions to extent of initial
        deduction
        With respect to any qualified intellectual property
      contribution, the deduction allowed under subsection (a) shall be
      increased under paragraph (1) only to the extent that the
      aggregate amount of such increases with respect to such
      contribution exceed the amount allowed as a deduction under
      subsection (a) with respect to such contribution determined
      without regard to this subsection.
      (3) Qualified donee income
        For purposes of this subsection, the term "qualified donee
      income" means any net income received by or accrued to the donee
      which is properly allocable to the qualified intellectual
      property.
      (4) Allocation of qualified donee income to taxable years of
        donor
        For purposes of this subsection, qualified donee income shall
      be treated as properly allocable to a taxable year of the donor
      if such income is received by or accrued to the donee for the
      taxable year of the donee which ends within or with such taxable
      year of the donor.
      (5) 10-year limitation
        Income shall not be treated as properly allocable to qualified
      intellectual property for purposes of this subsection if such
      income is received by or accrued to the donee after the 10-year
      period beginning on the date of the contribution of such
      property.
      (6) Benefit limited to life of intellectual property
        Income shall not be treated as properly allocable to qualified
      intellectual property for purposes of this subsection if such
      income is received by or accrued to the donee after the
      expiration of the legal life of such property.
      (7) Applicable percentage
        For purposes of this subsection, the term "applicable
      percentage" means the percentage determined under the following
      table which corresponds to a taxable year of the donor ending on
      or after the date of the qualified intellectual property
      contribution:


                 Taxable Year of Donor                    2Applicable   
                   Ending on or After                     Percentage:   
                 Date of Contribution:                                  
    --------------------------------------------------------------------
    1st                                                              100
    2nd                                                              100
    3rd                                                               90
    4th                                                               80
    5th                                                               70
    6th                                                               60
    7th                                                               50
    8th                                                               40
    9th                                                               30
    10th                                                              20
    11th                                                              10
    12th                                                             10.
    --------------------------------------------------------------------

      (8) Qualified intellectual property contribution
        For purposes of this subsection, the term "qualified
      intellectual property contribution" means any charitable
      contribution of qualified intellectual property - 
          (A) the amount of which taken into account under this section
        is reduced by reason of subsection (e)(1), and
          (B) with respect to which the donor informs the donee at the
        time of such contribution that the donor intends to treat such
        contribution as a qualified intellectual property contribution
        for purposes of this subsection and section 6050L.
      (9) Qualified intellectual property
        For purposes of this subsection, the term "qualified
      intellectual property" means property described in subsection
      (e)(1)(B)(iii) (other than property contributed to or for the use
      of an organization described in subsection (e)(1)(B)(ii)).
      (10) Other special rules
        (A) Application of limitations on charitable contributions
          Any increase under this subsection of the deduction provided
        under subsection (a) shall be treated for purposes of
        subsection (b) as a deduction which is attributable to a
        charitable contribution to the donee to which such increase
        relates.
        (B) Net income determined by donee
          The net income taken into account under paragraph (3) shall
        not exceed the amount of such income reported under section
        6050L(b)(1).
        (C) Deduction limited to 12 taxable years
          Except as may be provided under subparagraph (D)(i), this
        subsection shall not apply with respect to any qualified
        intellectual property contribution for any taxable year of the
        donor after the 12th taxable year of the donor which ends on or
        after the date of such contribution.
        (D) Regulations
          The Secretary may issue regulations or other guidance to
        carry out the purposes of this subsection, including
        regulations or guidance - 
            (i) modifying the application of this subsection in the
          case of a donor or donee with a short taxable year, and
            (ii) providing for the determination of an amount to be
          treated as net income of the donee which is properly
          allocable to qualified intellectual property in the case of a
          donee who uses such property to further a purpose or function
          constituting the basis of the donee's exemption under section
          501 (or, in the case of a governmental unit, any purpose
          described in section 170(c)) and does not possess a right to
          receive any payment from a third party with respect to such
          property.
    (n) Expenses paid by certain whaling captains in support of Native
      Alaskan subsistence whaling
      (1) In general
        In the case of an individual who is recognized by the Alaska
      Eskimo Whaling Commission as a whaling captain charged with the
      responsibility of maintaining and carrying out sanctioned whaling
      activities and who engages in such activities during the taxable
      year, the amount described in paragraph (2) (to the extent such
      amount does not exceed $10,000 for the taxable year) shall be
      treated for purposes of this section as a charitable
      contribution.
      (2) Amount described
        (A) In general
          The amount described in this paragraph is the aggregate of
        the reasonable and necessary whaling expenses paid by the
        taxpayer during the taxable year in carrying out sanctioned
        whaling activities.
        (B) Whaling expenses
          For purposes of subparagraph (A), the term "whaling expenses"
        includes expenses for - 
            (i) the acquisition and maintenance of whaling boats,
          weapons, and gear used in sanctioned whaling activities,
            (ii) the supplying of food for the crew and other
          provisions for carrying out such activities, and
            (iii) storage and distribution of the catch from such
          activities.
      (3) Sanctioned whaling activities
        For purposes of this subsection, the term "sanctioned whaling
      activities" means subsistence bowhead whale hunting activities
      conducted pursuant to the management plan of the Alaska Eskimo
      Whaling Commission.
      (4) Substantiation of expenses
        The Secretary shall issue guidance requiring that the taxpayer
      substantiate the whaling expenses for which a deduction is
      claimed under this subsection, including by maintaining
      appropriate written records with respect to the time, place,
      date, amount, and nature of the expense, as well as the
      taxpayer's eligibility for such deduction, and that (to the
      extent provided by the Secretary) such substantiation be provided
      as part of the taxpayer's return of tax.
    (o) Special rules for fractional gifts
      (1) Denial of deduction in certain cases
        (A) In general
          No deduction shall be allowed for a contribution of an
        undivided portion of a taxpayer's entire interest in tangible
        personal property unless all interests in the property are held
        immediately before such contribution by - 
            (i) the taxpayer, or
            (ii) the taxpayer and the donee.
        (B) Exceptions
          The Secretary may, by regulation, provide for exceptions to
        subparagraph (A) in cases where all persons who hold an
        interest in the property make proportional contributions of an
        undivided portion of the entire interest held by such persons.
      (2) Valuation of subsequent gifts
        In the case of any additional contribution, the fair market
      value of such contribution shall be determined by using the
      lesser of - 
          (A) the fair market value of the property at the time of the
        initial fractional contribution, or
          (B) the fair market value of the property at the time of the
        additional contribution.
      (3) Recapture of deduction in certain cases; addition to tax
        (A) Recapture
          The Secretary shall provide for the recapture of the amount
        of any deduction allowed under this section (plus interest)
        with respect to any contribution of an undivided portion of a
        taxpayer's entire interest in tangible personal property - 
            (i) in any case in which the donor does not contribute all
          of the remaining interests in such property to the donee (or,
          if such donee is no longer in existence, to any person
          described in section 170(c)) on or before the earlier of - 
              (I) the date that is 10 years after the date of the
            initial fractional contribution, or
              (II) the date of the death of the donor, and

            (ii) in any case in which the donee has not, during the
          period beginning on the date of the initial fractional
          contribution and ending on the date described in clause (i) -
          
              (I) had substantial physical possession of the property,
            and
              (II) used the property in a use which is related to a
            purpose or function constituting the basis for the
            organizations' exemption under section 501.
        (B) Addition to tax
          The tax imposed under this chapter for any taxable year for
        which there is a recapture under subparagraph (A) shall be
        increased by 10 percent of the amount so recaptured.
      (4) Definitions
        For purposes of this subsection - 
        (A) Additional contribution
          The term "additional contribution" means any charitable
        contribution by the taxpayer of any interest in property with
        respect to which the taxpayer has previously made an initial
        fractional contribution.
        (B) Initial fractional contribution
          The term "initial fractional contribution" means, with
        respect to any taxpayer, the first charitable contribution of
        an undivided portion of the taxpayer's entire interest in any
        tangible personal property.
    (p) Other cross references
          (1) For treatment of certain organizations providing child
        care, see section 501(k).
          (2) For charitable contributions of estates and trusts, see
        section 642(c).
          (3) For nondeductibility of contributions by common trust
        funds, see section 584.
          (4) For charitable contributions of partners, see section
        702.
          (5) For charitable contributions of nonresident aliens, see
        section 873.
          (6) For treatment of gifts for benefit of or use in
        connection with the Naval Academy as gifts to or for use of the
        United States, see section 6973 of title 10, United States
        Code.
          (7) For treatment of gifts accepted by the Secretary of
        State, the Director of the International Communication Agency,
        or the Director of the United States International Development
        Cooperation Agency, as gifts to or for the use of the United
        States, see section 25 of the State Department Basic
        Authorities Act of 1956.
          (8) For treatment of gifts of money accepted by the Attorney
        General for credit to the "Commissary Funds Federal Prisons" as
        gifts to or for the use of the United States, see section 4043
        of title 18, United States Code.
          (9) For charitable contributions to or for the use of Indian
        tribal governments (or their subdivisions), see section 7871.