|
b. Securities regularly traded in national or regional
<br />over - the - counter markets for which published quotations
<br />are available, or
<br />c. Securities that are shares of a mutual fund for
<br />which quotations are published on a daily basis in a
<br />newspaper of general circulation throughout the United
<br />States.
<br />Section B. Include in Section B only items (or groups of
<br />similar items) for which you claimed a deduction of more
<br />than $5,000. Do not include publicly traded securities
<br />reportable in Section A. With certain exceptions, items
<br />reportable in Section B require a written appraisal by a
<br />qualified appraiser.
<br />Similar Items of Property
<br />Similar items of property are items of the same generic
<br />category or type, such as coin collections, paintings,
<br />books, clothing, jewelry, nonpublicly traded stock, land,
<br />or buildings.
<br />Example. You claimed a deduction of $400 for
<br />clothing, $7,000 for publicly traded securities (quotations
<br />published daily), and $6,000 for a collection of 15 books
<br />($400 each). Report the clothing and securities in Section
<br />A and the books (a group of similar items) in Section B.
<br />Special Rule for Certain C Corporations
<br />A special rule applies for deductions taken by certain C
<br />corporations under section 170(e)(3) or (4) for certain
<br />contributions of inventory or scientific equipment.
<br />To determine if you must file Form 8283 or which
<br />section to complete, use the difference between the
<br />amount you claimed as a deduction and the amount you
<br />would have claimed as cost of goods sold (COGS) had
<br />you sold the property instead. This rule is only for
<br />purposes of Form 8283. It does not change the amount
<br />or method of figuring your contribution deduction.
<br />If you do not have to file Form 8283 because of this
<br />rule, you must attach a statement to your tax return
<br />(similar to the one in the example below). Also, attach a
<br />statement if you must complete Section A, instead of
<br />Section B, because of this rule.
<br />Example. You donated clothing from your inventory
<br />for the care of the needy. The clothing cost you $5,000
<br />and your claimed charitable deduction is $8,000.
<br />Complete Section A instead of Section B because the
<br />difference between the amount you claimed as a
<br />charitable deduction and the amount that would have
<br />been your COGS deduction is $3,000 ($8,000 – $5,000).
<br />Attach a statement to Form 8283 similar to the following:
<br />Form 8283 — Inventory
<br />Contribution deduction
<br />COGS (11 sold, not donated)
<br />For Form 8283 filing purposes
<br />$8,000
<br />– 5,000
<br />= $3,000
<br />Fair Market Value (FMV)
<br />Although the amount of your deduction determines if you
<br />have to file Form 8283, you also need to have
<br />information about the FMV of your contribution to
<br />complete the form.
<br />FMV is the price a willing, knowledgeable buyer would
<br />pay a willing, knowledgeable seller when neither has to
<br />buy or sell.
<br />You may not always be able to deduct the FMV of
<br />your contribution. Depending on the type of property
<br />donated, you may have to reduce the FMV to figure the
<br />deductible amount, as explained next.
<br />Reductions to FMV. The amount of the reduction (if
<br />any) depends on whether the property is ordinary income
<br />property or capital gain property. Attach a statement to
<br />your tax return showing how you figured the reduction.
<br />Ordinary income property. Ordinary income
<br />property is property that would result in ordinary income
<br />or short-term capital gain if it were sold at its FMV on the
<br />date it was contributed. Examples of ordinary income
<br />property are inventory, works of art created by the donor,
<br />and capital assets held for 1 year or less. The deduction
<br />for a gift of ordinary income property is limited to the FMV
<br />minus the amount that would be ordinary income or
<br />short -term capital gain if the property were sold.
<br />Capital gain property. Capital gain property is
<br />property that would result in long -term capital gain if it
<br />were sold at its FMV on the date it was contributed. For
<br />purposes of figuring your charitable contribution, capital
<br />gain property also includes certain real property and
<br />depreciable property used in your trade or business and,
<br />generally, held more than 1 year. However, to the extent
<br />of any gain from the property that must be recaptured as
<br />ordinary income under section 1245, section 1250, or any
<br />other Code provision, the property is treated as ordinary
<br />income property.
<br />You usually may deduct gifts of capital gain property at
<br />their FMV. However, you must reduce the FMV by the
<br />amount of any appreciation if any of the following apply.
<br />• The capital gain property is contributed to certain
<br />private nonoperating foundations. This rule does not
<br />apply to qualified appreciated stock.
<br />• You choose the 50% limit instead of the special 30%
<br />limit for capital gain property.
<br />• The contributed property is intellectual property (as
<br />defined on page 3).
<br />• The contributed property is certain taxidermy property
<br />donated after July 25, 2006.
<br />• The contributed property is tangible personal property
<br />that is put to an unrelated use (as defined in Pub. 526) by
<br />the charity.
<br />• The contributed property is certain tangible personal
<br />property donated after September 1, 2006, with a
<br />claimed value of more than $5,000 and is sold,
<br />exchanged, or otherwise disposed of by the charity
<br />during the year in which you made the contribution, and
<br />the charity has not made the required certification of
<br />exempt use (such as on Form 8282, Part IV).
<br />Qualified conservation contribution. A qualified
<br />conservation contribution is a donation of a qualified real
<br />property interest, such as an easement, exclusively for
<br />certain conservation purposes. The donee must be a
<br />qualified organization as defined in section 170(h)(3) and
<br />must have the resources to be able to monitor and
<br />enforce the conservation easement or other conservation
<br />restrictions. To enable the organization to do this, you
<br />must give it documents, such as maps and photographs,
<br />that establish the condition of the property at the time of
<br />the gift.
<br />If the donation has no material effect on the real
<br />property's FMV, or enhances rather than reduces its
<br />FMV, no deduction is allowable. For example, little or no
<br />deduction may be allowed if the property's use is already
<br />restricted, such as by zoning or other law or contract, and
<br />-2-
<br />- 9 -
<br />
|