The Tax Law of Charitable Giving. Bruce R. Hopkins

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The Tax Law of Charitable Giving - Bruce R. Hopkins


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the donee charities. Instead, the company serves as agent for the cardholders with respect to the rebate amounts it holds. Thus, although the rebates are held by the company, the cardholders retain control over them.

      For a charitable gift to be deductible, there must be the requisite delivery. It is not enough for there to be delivery to a party for subsequent delivery to a charitable organization. Accordingly, there is no delivery of a charitable contribution when the company receives the rebate amounts, nor when cardholders fail to claim rebates for their personal use. Rather, delivery occurs when the company transfers the rebate funds to the designated charities. (If the company served as the agent of the charities, the charitable deduction would arise at the time the company received the rebate amounts.) This program is designed to allow individuals to have the charitable deduction in the year of the rebate by enabling the company to transfer the rebates to charities before the close of the tax year.

      A person may make deductible gifts of tangible personal property to a charitable organization. Items of tangible personal property include works of art, furniture, automobiles, and clothing.

      Usually, there is no formal system in law for the recording and transfer of an item of tangible personal property. (The obvious exception, of course, is the title requirements involving motor vehicles.) In appropriate circumstances, however, title transfer of tangible personal property to a charitable organization can be evidenced by the making of a deed of gift.

      The foregoing rules apply with respect to gifts by both individual and corporate donors. Thus, the general rule that a federal income tax charitable contribution deduction arises at the time the contribution is made and for the year in which it is made is equally applicable to individual and corporate donors.


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