Charitable contributions

medical expense, but are personal expenses of the taxpayer. Modified by Rev. Rul. 60-255 to remove the conclusion that no part of the medical expenses connected with the adoption are deductible. (Sec. 262, ’86 Code.) Rev. Rul. 56-401, 1956-2 C.B. 169. 80.5 Aerial rights given to a charitable foundation. Taxpayers gave to a charitable foundation the rights of access and support as well as the perpetual right to build, own, and maintain five additional stories on their two-story building which was susceptible to such expansion without any changes to structure or foundation.Held, the rights and interests conveyed constituted property the value of which was deductible as a charitable contribution. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code,) R. W. Fair, 27 T.C. 866, Acq., 1957-2 C.B. 4. 80.6 Airline discount coupons. In 1979, an individual purchased several full price airline tickets and received a discount coupon for each ticket entitling the holder to purchase, at half the nondiscounted adult fare, one ticket for travel by one person on the same airline. Later in the year the individual donated the coupons to a charitable organization. The amount of the contribution is subject to the reduction provisions of section 170(e) and no deduction is allowable. §1.170A-4. (Sec. 170, ’86 Code.) Rev. Rul. 79-431, 1979–2 C.B. 108. 80.7 Annuity part of split insurance program. Under a split life insurance program, the owner of an annuity contract who exercised an option under it to purchase term life insurance at discount rates and then transferred all ownership rights to the annuity, including term life renewal, to an exempt charitable organization and made annual cash contributions equal to the annuity premium in exchange for permission to renew the term life policy does not have an allowable deduction. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 761, 1976–1 C.B. 57. 80.8 Annuity purchased from exempt organization. The amount paid a charitable organization by a taxpayer for an annuity to be paid him, his wife, and the survivor, is the purchase of an annuity resulting in neither a gain nor a loss to the taxpayers. The amount paid is regarded as consideration paid for it, since the present value of the annuity is in excess of the amount paid; therefor, deduction is no charitable allowed. §39.22(b)(2)-2. (Sec. 22(b), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 55–388, 1955-1 C.B. 233. 80.9 Annuity purchased in excess of fair market value. The amount in excess of fair market value of an annuity contract purchased from an organization described in section 170(c) may not be treated as an “investment in the contract” for computing the allowable exclusion from gross income of annuity proceeds, however, such amount may be deducted as a charitable contribution. §§1.72–6, 1.170-2. (Secs. 72, 170; ’86 Code.) Rev. Rul. 70-15, 1970-l C.B. 20. 80.10 Annuity purchased; payment returnable. The amount paid in excess of the value of an annuity purchased from a charitable organization is not allowable as a charitable contribution where the taxpayer has the power to terminate the agreement and require repayment of the entire amount paid for the annuity at any time prior to the annuity commencement date. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 73–1, 1973-1 C.B. 117. 80.11 Appraisal fee; donated property. An appraisal fee paid by a donor to determine the fair market value of property which he contributed to a qualified exempt organization is deductible under section 212(3) as an expense paid in connec- Charitable contributions (See also: Carrybacks and carryovers) 80.1 Additional amount paid on utility bills for emergency program. Utility customers, who pay additional amounts on their utility bills to a utility company acting as agent for a charitable organization that assists individuals with emergency energy needs, are entitled to a charitable deduction for the additional amount in the year paid. §170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 85–184, 1985–2 C.B. 84. 80.2 Admission cost or other participation in fund-raising events. Guidelines are provided regarding the deductibility, as charitable contributions, of payments made by taxpayers for admission to or other participation in fund-raising activities for charity. Distinguished by Rev. Rul. 74-348. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 67-246, 1967-2 C.B. 104. 80.3 Admission costs and meals; volunteer workers for underprivileged. Unreimbursed out-of-pocket expenses such as admission costs and meals incurred by volunteers for underprivileged juveniles who are selected by a charitable organization are deductible as a charitable contribution. The portion attributable to similar expenses of the volunteer is not deductible. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 70-519, 1970-2 C.B. 62. 80.4 Adoption expenses. Expenses incurred in connection with the adoption of a child are not deductible as a charitable contribution nor as a Charitable contributions tion with the determination of his income tax liability. §§1.170-1, 1.212-1. (Secs. 170, 212; ’86 Code.) Rev. Rul. 67-461, 1967-2 C.B. 125. 80.12 Appreciated property; tax preference. A carryover of an excess charitable contribution of tangible personal property made in 1991 will not generate an item of tax preference under section 57(a)(6) of the Code in any succeeding taxable year to which the excess maybe carried under the rules of section 170. §1.170A–1. (Secs. 57, 170; ’86 Code.) Rev. Rul. 90-111, 1990-2 C.B. 30. 80.13 Charitable remainder trusts; sample forms; annuity. This revenue procedure makes available a sample form of declaration of trust that meets the requirements for an inter vivos charitable remainder annuity trust providing for annuity payments for one life, as described in section 664(d)(1) of the Code. §§1.170A-6, 1.664-2. (Sec. 601.201, S.P.R.; Secs. 170, 664, 2522, ’86 Code.) Rev. Proc. 89-21, 1989-1 C.B. 842. 80.14 Army Unit Funds; U.S. United States Army Unit Funds are integral parts of the Army and individuals’ contributions to such funds are considered as made to or for the use of the United States for purposes of the deduction for charitable contributions. I.T. 3584 superseded. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 73-296, 1973-2 C.B. 67. 80.19 Association of educational institutions. Contributions to an association of educational institutions constitute gifts to such educational institutions, qualified for the maximum charitable contributions deduction, even though the contributions received by the association in a calendar year are invested in short term notes pending their complete distribution to the member institutions early in the following year. Distinguished by Rev. Rul. 60-110. §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 60-l11, 1960-1 C.B. 123. 80.20 Athletic scholarship program. Guidelines concerning whether payments to athletic scholarship programs are charitable contributions under section 170, when the payments afford the right to purchase preferred seating at university’s home football games. Rev. Rul. 84–132 is clarified, distinguished, and superseded. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 86-63, 1986-1 C.B. 88. 80.21 Automobile engine replacement cost. The cost of replacing an automobile engine damaged while transporting Boy Scouts is not deductible as a charitable contribution. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 59–239, 1959–2 C.B. 100. §§1.170A-1, 1.1031(a)-1. (Secs. 170, 1031; ’86 Code.) Rev. Rul. 76-253, 1976-2 C.B. 51. 80.27 Bargain sale; stock pledged by corporation. A corporation that pledges to sell shares of its common stock at a specified price to an educational organization is entitled to a charitable contribution deduction, in the taxable year thepledge is exercised, for the excess of the fair market value of the shares on the date of the exercise over the exercise price. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 75-348, 1975-2 C.B. 75. 80.28 Bargain sale; timberland; like kind exchange. An exchange of timberland owned by a producer of forest-related products for bare land of lesser value owned by a state, which is a bargain sale as defined in reg. 1.170A-4(c)(2)(iii), constitutes as exchange of like kind property.The basis of the property received from the state is determined under section 1031(d) as adjusted by applying section 1011(b). §§1.170A-4, 1.1011-2, 1.1031(a)-1, 1.1031(d)-1. (Secs. 170, 1011, 1031; ’86 Code.) Rev. Rul. 78-163, 1978-1 C.B. 257. 80.29 Benefit to donors. Certain payments to the Red Cross, a volunteer fire department, the Girl Scouts, and a combined charity fund are charitable contributions under section 170, even though the donors receive some benefits from the charitable organizations receiving the donations. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 80-77, 1980-1 C.B. 56. 80.30 Benefit to donor; tuition; church-sponsored schools. Tuition paid on behalf of children attending parochial, or other types of churchsponsored schools is not deductible as contributions or gifts. §39.23(o)-1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 54-580, 1954-2 C.B. 97. 80.31 Benefit to donor; tuition fees and donations; private school. Tuition fees and do nations that are required to be paid to a private educational organization as a condition of enrollment are not gifts and may not be deducted as charitable contributions. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 71-112, 1971-1 C.B. 93. 80.32 Benefit to donor; tuition fees and donations to private schools. Factual situations illustrate the distinction between qualified charitable contributions and tuition payments made to an organization that operates a private school. Rev. Rul. 79-99 superseded. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 83-104, 1983-2 C.B. 46. 80.33 Benefit to solicitor; work-study program. Amounts paid to an exempt religious organization by “sponsors,” who are solicited by individual members of a work-study program that includes attendance at the organization’s theological college, to pay the approximate cost of the individual’s tuition, room and board at the college are not deductible under section 170. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 79-81, 1979-1 C.B. 107. 80.34 Binational charitable foundation. Contributions to a binational charitable foundation created by executive agreement between theU.S. and a foreign country, financed by property contributed equally by the two countries, and whose assets, including the contributed property, would be equally divided between the U.S. and the foreign country in the event of dissolution, are not deductible. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 76-195, 1976–1 C.B. 61. 80.35 Blood donations. Furnishing blood for a transfusion, or to a blood bank is analogous to the rendering of a personal service by the donor rather than a contribution of “property” and the fair mar- 80.22 Automobile expenses; standard mileage rate. Procedures are set forth for use of an optional standard mileage rate by employees or self-employed individuals in computing deductible costs or operating passenger automobiles owned by them for business purposes or for use by 80.15 Art collection; educational gift to city taxpayers in computing transportation expenses for public museum. Taxpayers donated an orien- relating to charitable contributions, medical tal art collection to the city for use in the city’s expense, or moving expenses. Rev. Procs. 80-7, museum which is heavily utilized for credit and 80-32, and 81-54 superseded. §§1.62-1, classroom courses by the city’s public school sys- 1.162-17, 1.170A-1, 1.213-1, 1.217-2, 1.274-5, 1.1016-3, 1.1031(a)-1. (Sec. 601.105, S.P.R.; tem and area colleges and universities. Held, taxpayers are entitled to the additional deduction of Secs. 62, 162, 168, 170, 213, 217, 274, 1016, 1031, ’86 Code.) 10 percent of adjusted gross income under section Rev. Proc. 82–61, 1982–2 C.B. 849. 170(b)(1)(A); the museum is in operation an integral part of the city school system, so that the gift to the city for use in the museum was a gift to the 80.23 Automobile expenses of minister. Autocity for expansion and development of its educa- mobile expenses incurred by a minister while rentional organization. (Secs. 170, 503; ’86 Code.) dering services without compensation may not be Avery Brundage, 34 T.C. 1468, Acq. in result, deducted as a business expense, however, they may be deducted as a charitable contribution. 1970–2 C.B. xix. §§1.162-2, 1.170-2. (Secs. 162, 170; ’86 Code.) Rev. Rul. 69-645, 1969-2 C.B. 37. 80.16 Art object; future or undivided interest. An individual who transfers title to an art object to a museum or other exempt donee but 80.24 Ballet school. A ballet school which reserves the right to use it during his lifetime may offers a formal college preparatory program of in claim a charitable deduction based on the present struction and maintains a regular faculty, curricuvalue of the remainder interest in the art object. If lum, and enrollment of students at the place where he contributes an undivided present interest, the its educational activities are carried on is an educadeduction will be based on the fair market value of tional organization within the meaning of section l70(b)(1)(A) and contributions to the school qualthe undivided present interest. (Sec. 170, ’86 ify for the additional ten percent charitable conCode.) tributions deduction. §1.170-1. (Sec. 170, ’86 Rev. Rul. 57-293, 1957–2 C.B. 153. Code.) Rev. Rul. 67-447, 1967-2 C.B. 121. 80.17 Art object; one-half future interest. The owner of an art object who transfers to an organization described in section 170(c), one-half of 80.25 Bargain sale; partnership interest. his interest in the art object, subject to the retention Income tax consequences are given for a limited of control during his lifetime, is entitled to a partner’s charitable contribution of his entire deduction of the present value of the remainder interest in a limited partnership having liabilities interest for the taxable year in which the property that were not personally assumed by the partnerwas transferred. §1.170–1. (Sec. 170, ’86 Code.) ship or any of the partners. §§1. 170A-1, 1.170A-4, 1.741-1, 1.752-1, 1.1011-2. (Secs. 170, 741, 752, Rev. Rul. 58-455, 1958–2 C.B. 100. 1011; ’86 Code.) Rev. Rul. 75-194, 1975-1 C.B. 80. 80.18 Artistic composition; valuation. Section 170(e) does not apply to an October 1, 1969, contribution to the Library of Congress of an artis- 80.26 Bargain sale; timberland rights tic composition by the taxpayer who created it. reserved. A corporation’s exchange of timberThe composition, a noncapital asset described in land, with the corporation reserving the timbersection 1221 (3), was not a letter, memorandum, or cutting rights, for state-owned timberland of lesser similar property, and the amount of the charitable fair market value is not a bargain sale within the contribution is the composition’s fair market value meaning of section 170, and the corporation is not at the time of the contribution. §1.170A-4. (Sec. entitled to a charitable contribution deduction; 170, ’86 Code.) however, the exchange qualifies for nonrecognition of gain or loss under section 1031(a). Rev. Rul. 74-584, 1974-2 C.B. 81. Charitable contributions ket value of blood donated by an individual to a charitable institution is not deductible as a charitable contribution. §29.23(o)-1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 162, 1953–2 C.B. 127. 80.36 Board of education; contingent donations. While seeking contributions to help pay for a portion of the cost of constructing a multi-purpose building, a municipal board of education told donors that all contributions would be refunded if sufficient funds were not raised and that any excess donations would be retained by the board for general school purposes. The contributions are not deductible under section 170 until they are transferred to the construction fund or retained for general school purposes. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 79-249, 1979-2 C.B. 104. 80.37 Board of Education; securities irrevocably transferred. The fair market value of securities irrevocably transferred to a County Board of Education to fund a scholarship program, under which the Board has full and exclusive power to select scholarship recipients, is deductible by the taxpayer-donor as a charitable contribution “to” an organization referred to in section l70(b)(1)(A) prior to its amendment by the Tax Reform Act of 1969. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 70-562, 1970-2 C.B. 63. 80.38 Book collection; future interest; carryover; limitation period. A charitable contribution deduction claimed for donation of a rare book collection by a taxpayer who retained for life the right of full access to the collection and the right to deny access to others was a gift of a future interest not properly deductible in the year claimed; expiration of the limitation period for the year in which the deduction was claimed does not bar disallowance of the deductions for subsequent carryover years. §§1.170A-5, 301.6501(a)-1. (Secs. 170, 6501; ’86 Code.) Rev. Rul. 77-225, 1977–2 C.B. 73. 80.39 Books; library of bank. A donation of books to a bank for use in its public library is not deductible as a charitable contribution. (Sec. 170, ’86 Code.) Rev. Rul. 57-600, 1957-2 C.B. 162. 80.40 Books; library of bar association. The value of books contributed to the professional library of a bar association, an exempt business league, is not deductible as a charitable contribution. §§1. 170-1. (Sec. 170, ’86 Code.) Rev. Rul. 58-293, 1958-1 C.B. 146. 80.41 Books received by book reviewer; donated to charity. The value of books received and accepted by a book reviewer during his employment with a newspaper, which he donated to a charitable organization and claimed a contribution deduction for their value, is includable in his gross income. Rev. Rul. 70–330 superseded. §1.61-1. (Sec. 61, ’86 Code.) Rev. Rul. 70-498, 1970-2 C.B. 6. 80.42 Broadcast time donated by radio station. A radio station providing broadcast time, without charge, for various religious and other public affairs programs, may not deduct the fair market value of such time as a charitable contribution. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 67–236, 1967–2 C.B. 103. 80.43 Brokerage corporation; business expenses. A stock brokerage corporation’s payments to a charitable organization described in section 170(c)(2), made with a reasonable expectation of a financial return commensurate with the amount of the payments, are deductible as a business expense. §§1.162–1, 1.170-1. (Secs. 162, 170; ’86 Code.) Rev. Ru1. 72-314, 1972-1 C.B. 44. 80.44 Canadian or Honduran charitable organizations. Procedures for use in establishing the tax-exempt status of charitable organizations created or organized under the laws of Canada or Honduras, and determining the deductibility of contributions made to such organizations pursuant to tax conventions entered into between those countries and the U.S. §§1.170-1, 1.501(a)–1. (Sec. 601.201 S.P.R.; Secs. 170,501, ’86 Code.) Rev. Proc. 59-31, 1959-2 C.B. 949. 80.45 Cancellation of debt. Taxpayers received a mortgage secured note for money loaned a charitable organization to build a chapel. Each year a portion of the debt was forgiven by endorsing the gift amount on the back of the note. Held, the taxpayers were entitled to deduct as a charitable contribution the amount cancelled each year rather than deducting the entire loan in the year made. (Sec. 170, ’86 Code.) Nelson Story, 111, 38 T.C. 936, Acq., 1965-1 C.B. 4. 80.46 Capital assets; books purchased at volume discount. A taxpayer purchased books at a volume discount from a company located in a country where the retail price is legally fixed and imported them into the U.S. The taxpayer warehoused the books for just over 12 months and then donated them to charitable organizations. The taxpayer’s activity is tantamount to the activities of a book dealer and the books are ordinary income property under section 170(c). If the books’ fair market value in the U.S. is equal to or less than the taxpayer’s basis, the amount of the deduction is limited to such fair market value. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 79-419, 1979-2 C.B. 107 80.47 Capital assets; ornamental plants and lithograph prints. A taxpayer who raises ornamental plants, as a hobby, and each year donates a large number to various charities and a taxpayer, not an art dealer, who purchased a substantial part of the total limited edition of a particular lithograph print and donated the prints to various art museums are engaged in activities substantially equivalent to those of commercial dealers, and the amount of each contribution is subject to the 170(c), reduction provisions of section §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 79–256, 1979-2 C.B. 105. 80.48 Capital gain property; limitation; election; amended return. A taxpayer whose contributions of capital gain property were deducted on a timely filed return and were limited to 30 percent of the taxpayer’s contribution base may not elect to deduct contributions of capital gain property up to the 50 percent limitation of section 170(b)(1)(A) on an amended return filed after the due date for filing the original return. §1.170A-8. (Sec. 170, ’86 Code.) Rev. Rul. 77-217, 1977-1 C.B. 64. 80.49 Cemetery organization for perpetual care. Voluntary contributions to or for the use of a nonprofit cemetery organization, the funds of which are irrevocably dedicated to the perpetual care of the cemetery, as a whole, are deductible by the donors as charitable contributions. However, a donor may not deduct a contribution for the perpetual care of a particular lot or mausoleum. Payments which constitute apart of the purchase price of a lot or mausoleum and are irrevocably dedicated to a perpetual care fund are not deductible as a charitable contribution. (Sec. 170, ’86 Code.) Rev. Rul. 58-190, 1958-1 C.B. 15. 80.50 Charitable organization cooperating in advertising program. Amounts paid by a corporation to a charitable organization for the use of its name and cooperation in connection with the corporation’s advertising program are not gifts or contributions but are deductible business expenses. §§1.162–15, 1.170–3. (Secs. 162, 170; ’86 Code.) Rev. Rul. 63-73, 1963-1 C.B. 35. 80.51 Charitable remainder interest in alimony trust. Under a divorce settlement a taxpayer made an irrevocable transfer of securities to a trust for the benefit of his wife. The trust terminates upon her death or remarriage, with remainder over to a charitable foundation. The husband was entitled to a deduction for charitable contributions for the value of the securities on the date of transfer minus the present value of the wife’s income right. He realized no gain on appreciation in value of the securities transferred. Distinguished from Rev. Rul. 57-507 by Rev. Rul. 59-47. (Sec. 170, ’86 Code.) Rev. Rul. 57-506, 1957-2 C.B. 65. 80.52 Charitable remainder interest in irrevocable trust. Where a taxpayer creates an irrevocable trust for his wife to provide for the discharge of his obligation to her for the remainder of her life, with the remainder interest to an educational organization, the transfer of property to the trust will result in the realization of taxable income and a deductible contribution by the grantor. Capital gains realized by the trust, from the disposition of property, which are by the terms of the agreement specifically allocated to principal, constitute allowable deductions under section 642(c). Distinguished from Rev. Rul. 57–506 by Rev. Rul. 59-47. (Sec. 170, ’86 Code.) Rev. Rul. 57–507, 1957–2 C.B. 511. 80.53 Charitable remainder interest in personal residence. No deduction is allowable for the gift of a remainder interest in a personal residence to a charity by the donors who placed a condition on the gift requiring the donee to sell its remainder interest and receive cash in lieu thereof if the donors decided to sell the residence before they die. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 77-305, 1977-2 C.B. 72. 80.54 Charitable remainder trusts; investment of assets. The investment by a university, as trustee, of the assets of charitable remainder trusts in its general endowment investment fund will not jeopardize the exempt status of the charitable remainder trusts or the donor’s charitable contribution deductions. Rev. Rul. 73–571 amplified. §§1.170A-6, 1.664-1. (Secs. 170, 664; ’86 Code.) Rev. Rul. 83–19, 1983–1 C.B. 115. 80.55 Charitable remainder unitrust; funded by income-producing securities. A contribution of appreciated income-producing securities to a university through a charitable remainder unitrust, whose governing instrument contained no express or implied obligation to sell or exchange the securities, is a deductible charitable contribution subject to the limitations of section 170(b) in an amount equal to the actuarial computation of the present value of the remainder interest valued at net fair market value at the time the securities were transferred to the trust. §§1.170A-6, 1.170A-8, 1.664A. (Secs. 170, 664; ’86 Code.) Rev. Rul. 74–53, 1974–1 C.B. 60. 80.56 Charities designated by corporation employees. Amounts paid by a corporation to qualified religious, charitable, and educational organizations designated by its employees pursuant to a charitable designation plan are deductible by the corporation; the employees are not in receipt of gross income with respect to these contributions. §§1.61-1, 1.170-1. (Secs. 61, 170; ’86 Code.) Rev. Rul. 67-137, 1967-1 C.B. 63. 80.57 “Charity Day” proceeds distributed by race track. “Charity Day” proceeds distributed to a charitable foundation by a pari-mutuel race track corporation must be included in the corporation’s income. Such amount is not a deductible business expense but is deductible as a charitable Charitable contributions contribution. Distinguished by Rev. Rul. 77–121. §§1.61-2, 1.162-15,1.170-3. (Secs. 61, 162, 170; ’86 Code.) Rev. Rul. 72-542, 1972-2 C.B. 37. 80.58 “Charity Day’’ proceeds distributed by race track. Charity day race proceeds distributed by a parimutuel race track corporation to an exempt charitable organization that agreed to absorb any losses arising from the event and assume all responsibility for promotion are not includible in the corporation’s gross income for Federal income tax purposes. Rev. Rul. 72-542 distinguished. §§1.61-2, 1.170A-1. (Secs. 61, 170; ’86 Code.) Rev. Rul. 77-121, 1977-1 C.B. 17. tribution of a church directory are not deductible as charitable contributions. (Sec. 170, ’86 Code.) Rev. Rul. 57-525, 1957-2 C.B. 159. 80.66 Church missionary fund; designated missionary. Taxpayer’s contributions to a mission, some of which were designated for the support of specific missionaries, were all placed in a common pool and used as the mission saw fit. Held, the amounts were deductible. (Sec. 170, ’86 Code.) George E. Peace, 43 T.C. 1, Acq., 1965-2 C.B. 6. exclusively public purposes. §1.1702. (Sec. 170, ’86 Code.) Rev. Rul. 58-464, 1958–2 C.B. 103. 80.74 Civil Air Patrol; vehicle expenses. Expenses directly attributable to the performance of volunteer services for the Civil Air Patrol are deductible as charitable contributions. Such expenses include operation, maintenance and repair of vehicles. However, no deduction is allowable for the fair rental value of such use, the depreciation occasioned by such use, or for liability and property damage insurance carried on such vehicle for the protection of the individual. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 58-279, 1958-1 C.B. 145. 80.75 Club members; sickness or burial expenses. Contributions to a club for the purpose of defraying sickness or burial expenses of deceased members of the club constitute contributions made to individuals and, as such, are not deductible by the donors. (Sec. 170, ’86 Code.) Rev. Rul. 57–188, 1957-1 C.B. 97. 80.76 College fraternity. A college fraternity organized on a non-profit basis that maintains a chapter house for active members who are students of the school, is exempt from tax as a social club under section 501(c)(7) but is not exempt under section 501(c)(3). Contributions to the fraternity are not deductible. I.T. 1427 and G.C.M. 5952 superseded. §§1.170-1, 1.501(c)(3)-1, 1.501(c)(7)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 69-573, 1969-2 C.B. 125. 80.77 Communal religious organization. Contributions made to or for the use of a communal religious organization exempt under section 501(d) are not deductible if such organization is engaged in the operation of a commercial enterprise the proceeds of which inure to the common benefit of its members. §1.642(c)-1. (Secs. 170, 642; ’86 Code.) Rev. Rul. 57-574, 1957-2 C.B. 161. 80.78 Community recreational organization; facilities restricted. A nonprofit corporation which was organized to provide community recreational facilities without charge to the residents of a township, but which restricts their use to less than the entire community on the basis of race is not organized and operated exclusively for charitable purposes. Contributions and transfers to or for the use of such an organization are not deductible. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 67-325, 1967–2 C.B. 113. 80.79 Community trusts; governing instruments. Examples are given of provisions in the governing instruments of community trusts that reg. of requirements the meet 1.170A-9(e)(11)(v)(B). §1.170A-9. (Sec. 170, ’86 Code.) Rev. Rul. 77-333, 1977-2 C.B. 75. 80.80 Community trusts; required resolutions. Examples are given of resolutions adopted by community trusts with respect to the administration of such trusts or funds that satisfy the requirements of reg. 1.170A-9(e)(11)(v)(E) and (F). §1.170A-9. (Sec. 170, ’86 Code.) Rev. Rul. 77-334, 1977–2 C.B. 77. 80.81 Congress member; constituents’ contributions; trust fund for travel expenses. Contributions to a trust established to provide funds for certain travel expenses incurred by a taxpayer as a Member of Congress and the taxpayer’s staff in connection with the performance of official duties do not qualify as gifts under section 102(a) and are includable in the taxpayer’s gross income in the year received by the trust. However, the amounts disbursed for travel expenses are deductible business expenses, unexpended funds returned to the contributors on termination of the trust are deductible as a business loss, and any por- 80.67 Church missionary fund; donor’s son serving as missionary. Payments made to a missionary from a church fund as reimbursement for 80.59 “Charity Day” profits distributed by travel and living expenses incurred in the services race track. A parimutuel race track corporation of his church are not includible in the missionary’s that agrees to promote, and absorb any losses gross income. Contributions to the church fund by from, extra racing days each year for the benefit of the parent of the missionary are deductible as charlocal charities to obtain and ensure retention of its itable contributions if the organization has full license must include revenues from the extra days control of the donated funds and discretion as to in its gross income and may deduct as a business expense under section 162 the profits turned over their use. The parent may claim the dependency wbere the to the charities. §§1.61–1, 1.162–1, 1.170A-1. exemption (excluding son’s gross income is less than $600 the reimbursed expenses) (Secs. 61, 162, 170; ’86 Code.) and amounts furnished directly by the parent to his Rev. Rul. 77-124, 1977-1 C.B. 39. son constitute more than one-half of his total sup80.60 Child care expenses. Amounts paid by a port for the calendar year. §§1.61-1, 1.151-2, 1.170-1. (Secs. 61, 151, 170; ’86 Code.) taxpayer for the care of her children while she perRev. Rul. 62-113, 1962-2 C.B. 10. formed gratuitous services for a charitable organization are personal expenses not deductible as charitable contributions or as child care expenses. 80.68 Church of Scientology. The legislative §§1.170A-1, 1.262-1. (Secs. 170, 214, 262; ’86 history of the “contribution or gift” limitation under section 170 reveals that Congress intended Code.) to differentiate between unrequited payments to Rev. Rul. 73-597, 1973-2 C.B. 69. qualified recipients, which are deductible, and 80.61 Child care service; food program. Pay- payments made to such recipients with some ments received from a sponsoring charitable orga- expectation of a quid pro quo in terms of goods or nization pursuant to the Child Care Food Program services, which are not deductible. (Sec. 170, ’86 are excludable from a day care home operator’s Code.) Hernandez, Ct. D. 2046, 1989-2 C.B. 55. gross income to the extent that such payments do not exceed expenses incurred in feeding children eligible for assistance under the program. Any 80.69 Church of Scientology. Revenue Ruling portion of the payment that compensates the oper- 78-189 is obsoleted. §1.170A-1. (Sec. 170, ’86 ator for services is includable in income. Out-of- Code.) Rev. Rul. 93-73, 1993-2 C.B. 75 pocket expenses in excess of reimbursement are deductible under section 170 where no profit motive exists and under section 162 where such 80.70 Church operated schools with discrimimotive does exist. §§1.61–1, 1.162–1, 1.170A-1. natory policies. Organizations, including (Secs. 61, 162, 170; ’86 Code.) churches, that conduct schools with a policy of Rev. Rul. 79-142, 1979-1 C.B. 58. refusing to accept children from certain racial and ethnic groups will not be recognized as tax-ex80.62 Child care service; out-of-pocket empt charities. §§1.170A-1, 1.561(c)(3)–1. (Secs. expenses. Factual situations illustrate the tax 170, 501; ’86 Code.) treatment of amounts received and amounts Rev. Rul. 75-231, 1975-1 C.B. 158. expended by individuals providing child care services in their own homes. Rev. Rul. 56-70 super- 80.71 Church owned by taxpayer. Expendiseded. §§1.61-1, 1.62-1, 1.162-1, 1.170-2, tures made by the taxpayer to repair and refurbish 1.1401-1. (Secs. 61, 62, 162, 170, 1401, 3121, a chapel owned by him and located on his prop3306, 3401; ’86 Code.) erty, which has been used exclusively as a public Rev. Rul. 77-279, 1977-2 C.B. 12. church by the surrounding community for more than 240 years, were deductible as charitable con80.63 Church; benefit of contributors. An tributions. (Sec. 23(o), ’39 Code; Sec. 170, ’86 individual who claims to be a minister, organizes Code.) a church, deposits checks for salary earned from Philip A. Carroll, 38 T.C. 868, Acq., 1963-2 outside employment in the church’s bank account, C.B. 4. and uses the funds of the account for lodging, food, clothing, and other living expenses is not entitled 80.72 Civic league distributing literature to to a charitable deduction for the amount of the schools, etc. Payments to a tax-exempt noncharitsalary checks. §1.170A-1. (Sec. 170, ’86 Code.) able organization described in section 501(c)(4) Rev. Rul. 78–232, 1978–1 C.B. 69. for the purpose of subsidizing the dissemination of 80.64 Church building bonds purchased. The its literature to charitable, educational, etc., orgaamount paid to purchase building bonds issued by nizations described in section 501(c)(3) are not a church is not deductible as a charitable contribu- deductible as charitable contributions. (Sec. 170, tion. However, the fair market value of such bonds ’86 Code.) Rev. Rul. 55-269, 1955-1 C.B. 29. if donated to the church may be deductible as a charitable contribution. §1.170-1. (Sec. 170, ’86 80.73 Civic organization. Contributions made Code.) to a civic organization whose activities are Rev. Rul. 58-262, 1958-1 C.B. 143. designed to promote the welfare of a particular 80.65 Church directory published by individ- community and to restrict business interests in the ual. Contributions or gifts to an individual for the area are not deductible as charitable contributions purpose of financing the publication and free dis- to or for use of a political subdivision of a state for Charitable contributions tion of the contributions donated from the terminated trust to charitable organizations is deductible to the extent provided in section 170. §§1.61-1, 1.102-1, 1.162-2, 1.165-1, 1.170A-1. (Secs. 61, 102, 162, 165, 170; ’86 Code.) Rev. Rul. 76-276, 1976-2 C.B. 14. 80.82 Congressional salary returned to Treasury. The salary of a Congressman is gross income; however, any portion which he returns to the U.S. Treasury is deductible as a charitable contribution. (Secs. 61, 170; ’86 Code.) Rev. Rul. 56–126, 1956-1 C.B. 56. 80.83 Corporation; donation of dated products. When a corporation donates products to a charitable organization shortly before their expiration date, the amount allowable as a charitable contribution deduction is equal to the unrealized appreciation, not to exceed twice the taxpayer’s basis in such property. Rev. Rul. 83–29 §§1.170A-1, clarified and superseded. 1.170A-4A. (Sec. 170, ’86 Code.) Rev. Rul. 85–8, 1985–1 C.B. 59. 80.84 Corporation; transfers to exempt sole stockholder. Amounts transferred without consideration by a taxable corporation to its sole stockholder, an organization exempt from tax under section 501(c)(3), are distributions constituting dividends to the extent provided in section 316(a) and are not deductible as charitable contributions. §§1.170–3, 1.316–1, 1.512(b)–1. (Secs. 170, 316, 512; ’86 Code.) Rev. Rul. 68-296, 1968-1 C.B. 105. 80.85 Crop shares. The fair market value of crop shares received as rent by a farmer-landlord, which are contributed to a charitable organization or are used as feed in the farming operation, must be included in the farmer-landlord’s gross income at the time of such contribution or use. The taxpayer is considered to have made a charitable contribution or becomes entitled to a business expense deduction at the same time and in the same amount as the income recognized. Taxpayer may be entitled to use the optional method of determining net earnings from self-employment under section 1402(a) and the retirement income credit under section 37. Rev. Ruls. 56-496 and 63-66 modified. §§1.61-4, 1.162-12, 1.170A-1, 301.7805-1. (Secs. 61, 162, 170, 7805; ’86 Code.) Rev. Rul. 75-11, 1975–1 C.B. 27. 80.86 Cumulative List of organizations. The extent to which contributors may rely on the listing of organizations in Publication No. 78, Cumulative List of Organizations, for purposes of deducting contributions under section 170 and for making grants under section 4945, is provided. Rev. Proc. 72-39 superseded. §§1.170A-1, 1.501(c)(3)–1, 53, 4945–5. (Sec. 601.105, S.P.R.; Secs. 170, 501, 4945,7428; ’86 Code.) Rev. Proc. 82–39, 1982–2 C.B. 759. 80.87 Dance lessons. The value of the right to dancing lessons purchased from a dancing school and subsequently donated to a qualified charitable organization for use in furthering its charitable purposes is deductible. The amount paid for the lessons may serve as a guide in determining the value of the right. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 68–113, 1968-1 C.B. 80. 80.88 Debenture bond or promissory note. A debenture bond or a promissory note issued and delivered by the obligor to a charitable organization represents a mere promise to pay at some future date and is not a “payment” for purposes of section 170. However, a charitable contribution deduction is allowable for the payment made to redeem the bond or for the required face amount payments irrespective of whether the payments are made to the charitable organization or to a subsequent transferee. In addition, a deduction is allowable for interest paid on the obligations only 80.97 Domestic charity; funds for foreign charity. Deductibility of contributions by individuals to a charity organized in the U.S. which thereafter transmits some or all of its funds to a foreign 80.89 Debt for equity swaps. The federal income tax consequences are set forth for various charitable organization are discussed in connectransactions that are a part of a foreign country’s tion with five illustrative examples. Amplified by program to reduce the amount of its outstanding Rev. Rul. 66-79. §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 63-252, 1963-2 C.B. 101. U.S. dollar denominated debt. §§1.170A-1, 1.1001-1. (Secs. 170, 1001; ’86 Code.) 80.98 Domestic charity; funds for foreign Rev. Rul. 87–124, 1987–2 C.B. 205. charity. Contributions to a domestic charity, 80.90 Deductibility; rulings and determina- solicited for a specific project of a foreign charitable organization, are deductible as charitable contion procedures. Procedures are provided for applying for recognition of exemption and for tributions where the domestic charity has revoking or modifying exemption rulings and reviewed and approved the project as being in furdetermination letters. Rev. Procs. 72-4, 76-33, therance of its own exempt purposes and has con77-21, superseded; Rev. Proc. 76-34 modified; trol and discretion as to the use of the contribuRev. Proc. 77–31 revoked. Amplified by Rev. tions. Rev. Rul. 63–252 amplified. §1.1701. (Sec. 170, ’86 Code.) Proc. 80-28. §§1.170A-1, 1.501(a)-1, Rev. Rul. 66-79, 1966-1 C.B. 48. 1.509(a)-1, 1.521-1, 53.4942(b)-1. (Sec. 601.201, S.P.R.; Secs. 170, 501, 509, 521, 4942, 80.99 Domestic charity; funds used in foreign 7428, ’86 Code.) country. A domestic commercial corporation is Rev. Proc. 80-25, 1980-1 C.B. 667. entitled to a charitable contribution deduction for unrestricted contributions to a domestic charitable 80.91 Deductible amount; patrons receiving corporation even though the contribution is used something in return. Guidelines on when benefits received in connection with a payment to char- in a foreign country. §1.170-3. (Sec. 170, ’86 ity will be considered to have insubstantial fair Code.) Rev. Rul. 69–80, 1969–1 C.B. 65. market value for purposes of advising patrons how much is deductible and how much is not. Rev. Rul. 80.100 Domestic charity; funds used in for67-246 amplified. §1.170A-1. (Sec. 170, ’86 eign country. Contributions by an individual to a Code; sec. 601.105, S.P.R.) domestic charity, formed to deal with the problem Rev. Proc. 90-12, 1990-1 C.B. 471. of plant and wildlife ecology in a foreign country through programs that include grants to foreign 80.92 Deductible amount; patrons receiving organizations and over which it maintains control something in return. Guidelines on when chariand responsibility, are deductible as charitable ties may advise potential contributors that con- contributions. §1.170A-1. (Sec. 170, ’86 Code.) tributions are fully deductible, when charitable Rev. Rul. 75-65, 1975–1 C.B. 79. solicitations are accompanied by free, unordered, low cost items. Rev. Proc. 90-l2 amplified. 80.101 Educational organization; elemen§1.170A-1. (Sec. 601.105, S.P.R.; Sec. 170, ’86 tary school. An organization providing an eleCode.) mentary education for children may meet the Rev. Proc. 92-49, 1992-1 C.B. 987. requirements for an educational organization and, therefore, is not a private foundation even though 80.93 Deductible amount; patrons receiving it has no formal course program or formal classsomething in return. Guidance is provided to room instruction. §1.170-1. (Secs. 170, 509; ’86 section 501(a) exempt organizations in determinCode.) ing the inflation adjusted amounts for the years Rev. Rul. 72-430, 1972–2 C.B. 105. 1991 and 1992, for the definition of “low cost article” under section 513(h)(2), on when benefits 80.102 Educational organization; guided received in connection with a payment to charity tours with incidental instruction. An exempt will be considered to have an insubstantial fair organization whose primary function is conductmarket value for the purposes of advising patrons ing guided tours, during which the participants are how much is deductible and how much is not. Rev. instructed in the skills and crafts of the area in Proc. 90-12 supplemented. §1.170A-1. (Sec. which they are touring, does not qualify as a non601.105, S.P.R.; Secs. 170, 513, ’86 Code.) profit educational organization. §1.170A-9. (Secs. Rev. Proc. 92-58, 1992-2 C.B. 410. 170, 4057, 4221, 4294; ’86 Code.) Rev. Rul. 76-237, 1976-1 C.B. 330. 80.94 Deductions; raffle tickets; home sold 80.103 Educational organization; oriental through charity raffle. The tax consequences of the sale of a personal residence through a raffle philosophy and psychic phenomena courses. conducted by a charitable organization are dis- An organization exempt under section 501(c)(3) cussed. §§1.61–1, 1.165–1, 1.170A-1, 1.1001–1. that offers a variety of lectures, workshops, and short courses on oriental philosophies and psychic (Secs. 61, 165, 170, 1001; ’86 Code.) phenomena, led by various invited authorities and Rev. Rul. 83-130, 1983-2 C.B. 148. noted personalities in these fields and open to the 80.95 Depreciable property; multiple asset general public as well as members who wish to account. The method is provided for determining attend, is not an educational organization. the amount of a charitable contribution for prop- §1.170A-9. (Sec. 170, ’86 Code.) erty retired from a multiple asset account for Rev. Rul. 78–82, 1978-1 C.B. 70. which the CLADR system had not been elected. 80.104 Educational organization; student §§1.167(a)-8, 1.170A-1. (Secs. 167, 170; ’86 intern program. An organization exempt under Code.) section 501(c)(3), that conducts an internship proRev. Rul. 80-174, 1980-2 C.B. 67. gram placing college and university students with 80.96 Development land; release to county. cooperating government agencies for a semester, The release of frontage to a county, for widening is not an educational organization described in a road, in order to obtain required approval by the section 170(b)(1)(A)(ii) and is a private foundacounty planning commission of the plot plan of tion unless otherwise described in section 509(a). certain lots prior to their sale, does not constitute §§1.170A-9, 1.509(a)-1. (Secs. 170, 509; ’86 a gift, nor does it qualify as a charitable contribu- Code.) Rev. Rul. 76-417, 1976-2 C.B. 58. tion. However, the cost of the frontage is a part of if they are enforceable. If the obligation is not enforceable, any payment of “interest” is allowable as a charitable contribution. Distinguished by Rev. Rul. 78-38. §§1.163-1, 1.170-1. (Secs. 163, 170; ’86 Code.) Rev. Rul. 68-174, 1968-1 C.B. 81. the total cost basis of the remaining property. (Secs. 170, 1011; ’86 Code.) Rev. Rul. 57-488, 1957-2 C.B. 157. Charitable contributions 80.105 Educational organization; summer school. The additional ten percent charitable deduction is applicable to contributions to an exempt educational organization whose only function is to conduct classes for eight weeks each summer during which it maintains a regular faculty and curriculum with regularly enrolled students. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 69-492, 1969-2 C.B. 36. ciaries. §§1.642(c)–1, 1.661(a)–2. (Secs. 642, 661; ’86 Code.) Rev. Rul. 68–667, 1968-2 C.B. 281. 80.113 Estates and trusts; income from realty. Income received by executors from realty specifically devised in trust for charitable purposes, but subject to administration under state law, is includible in the gross income of the estate and deductible as a charitable donation. §1.642(c)-1. (Sec. 642, ’86 Code.) Rev. Rul. 57-133, 1957-1 C.B. 200. the second case is limited to the cash paid. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 80-329, 1980-2 C.B. 70. 80.120 Fair market value; gems. A taxpayer purchased an assortment of gems from a promoter who asserted that the price was “wholesale” and who claimed that if the taxpayer held the gems for over one year and then contributed them to charity, the taxpayer would be entitled to deduct three times the price paid. The deduction allowable is the fair market value of the gems at the time of the contribution, not an artificially calculated estimate of value. The best evidence for the fair market value is the price at which the promoter sold the gems to the taxpayer. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 80-69, 1980-1 C.B. 55. 80.121 Family cemetery company. Contributions to an organization which owns, operates, and maintains a cemetery for the exclusive burial of lineal descendants of a particular family and those who intermarry with those descendants, and which is supported by funds from the descendants, are not deductible. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 65-6, 1965–1 C.B. 229. 80.122 Federal social security trust fund; voluntary contribution. A voluntary contribution to the federal social security trust fund is a contribution to the United States for purposes of section 170(c)(1), and is deductible under section 170. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 82-169, 1982-2 C.B. 72. 80.123 Fees of staff physicians remitted to hospital. Staff physicians of a hospital must include in their gross income fees received from insurance for treatment of patients admitted to the hospital without a physician’s recommendation even though they voluntarily turn the fees over to the hospital. However, they are entitled to a charitable contribution deduction for the amounts turned over to the hospital. Amplified to provide that medicare fees collected by a charitable organization are includable in the gross income of the physician performing the services for which the fees were paid, such fees are not deductible by the individual physician as an ordinary and necessary business expense, but are deductible as a charitable contribution. Rev. Rul. 66–377, providing that fees remitted to a medical school as required by an employment contract are includable in gross income but deductible as business expenses, distinguished. §§1.61–2, 1.162–1, 1.170–1. (Secs. 61, 162, 170; ’86 Code.) Rev. Rul. 69-275, 1969-1 C.B. 36; Rev. Rul. 70-161, 1970-1 C.B. 15. 80.124 Films donated by producer. Films produced by taxpayer and donated to qualifying charities were tangible commodities with values separate from the services going into their production. The value assigned to the films by taxpayer was creditable and uncontested and allowable as a deduction. (Sec. 170, ’86 Code.) John R. Holmes, 57 T.C. 430, Acq., 1972-1 C.B. 2. 80.125 Financial support; educational institutions. Amounts paid by a corporation under a two-part program to provide financial support in the form of scholarships or grants-in-aid to educational institutions exempt under section 501(c)(3) are deductible as charitable contributions. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 68-484, 1968-2 C.B. 105. 80.126 Foreign exchange program. Fees paid by a family participating in a foreign exchange program equal to the cost of travel and insurance and the expenses incurred on behalf of the foreign child while living in the U.S. family’s household are not charitable contributions. However, con- trade 80.106 Educational organization; school. A nonprofit organization created as a result of collective bargaining agreements to train individuals desiring to acquire skills in an industry 80.114 Estates and trusts; set-aside deducis exempt under section 501(c)(3); it is also an tion. If a trustee has discretionary power under a educational organization described in section will to allocate gains from the sale or other disposil70(b)(1)(A) and, therefore, is not a private tion of property constituting principal either to foundation under section 509(a). §§1.170-1, income or to principal, any amount set aside for is not deductible. charitable purposes 1.501(c)(3)-1. (Secs. 170, 501, 509; ’86 Code.) §1.642(c)-1. (Sec. 642, ’86 Code.) Rev. Rul. 72-101, 1972-1 C.B. 144. Rev. Rul. 73-95, 1973-1 C.B. 322. 80.107 Employees’ pension trust. A trust organized primarily to pay pensions to retired 80.115 Exempt organization; noneducational employees, and to provide incidental benefits to activities. The extra ten percent deduction for employees or their beneficiaries in times of need, charitable contributions to exempt organizations is not exempt as a charitable organization. Con- does not apply to an organization which does not tributions to such a trust are not deductible by the meet the requirements of section 503(b)(2) of donors as charitable contributions. (Secs. 170, maintaining a regular faculty and curriculum and having a regularly enrolled body of pupils or stu501; ’86 Code.) dents, even though such an organization accomRev. Rul. 56-138, 1956-1 C.B. 202. plishes its exempt educational purposes by holding conferences, discussions, and seminars to 80.108 Employees’ pension trust; exempt which prominent men and women from all fields organization; third party donors. Contributions made by third parties to a pension plan trust estab- of endeavor are invited to attend and participate. lished by an exempt organization for the benefit of §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 64-128, 1964-1 (Part 1) C.B. 191. its employees are deductible by the donors as charitable contributions. §1.170-1. (Sec. 170, ’86 80.116 Expenses; foster care. Factual situaCode.) tions illustrate the tax treatment of amounts Rev. Rul. 71-270, 1971-1 C.B. 94. received and amounts expended by individuals providing foster care to children. I.T. 4068 supercontributions; union seded. §§1.61–1, 1.62–1, 1.151–2, 1.162–1, 80.109 Employer educational and cultural trust. A statement in an 1.170-2, 1.1401-1, 1.6041-1. (Secs. 61, 62, 151, exemption ruling that contributions to a tax-ex162, 170, 280A, 1401, 3121, 3306, 3401, 6041; empt union educational and cultural trust are ’86 Code.) deductible by the donors under section 170 does Rev. Rul. 77-280, 1977-2 C.B. 14. not preclude the deduction under section 162 of payments made to the trust by an employer as a 80.117 Expenses; aiding hurricane evacuees. result of a collective bargaining agreement if the Actual unreimbursed expenses incurred by an payments otherwise qualify as business expenses. individual directly connected with and solely §§1.162-10, 1.170-3. (Secs. 162, 170; ’86 Code.) attributable to providing necessities such as food, Rev. Rul. 74-51, 1974-1 C.B. 45. lodging and clothing to hurricane evacuees, referred to him by an organization described in 80.110 Endowment life insurance contract. section 170 during the emergency are deductible Taxpayer sold an unencumbered life insurance as contributions or gifts. (Sec. 170, ’86 Code.) policy to a charitable organization for an amount Rev. Rul. 66-10, 1966-1 C.B. 47. equal to his basis therein donating his remaining interest to charity. At the same time, he made a gift 80.118 Fair market value; bibles. A taxpayer of an unencumbered annuity contract to his son, In purchased bibles from a promoter who asserted the following year, both contracts matured and that they could be purchased at a considerable diswere surrendered by the donees. Held, the donor count from retail price and claimed that if the taxreceives taxable income at the time the insurance payer held the bibles over twelve months and then company pays the donees, a gift of such a contract contributed them to a charitable organization, the to a charitable organization is a charitable gift in taxpayer would be entitled to deduct the “retail” the year the contract is transferred, and a gift of the price as a charitable contribution. The charitable contract to his son is subject to gift tax for the year deduction is limited to the fair market value of the of its transfer. §§1.61–1, 1.170-1. (Secs. 61, 170; bibles at the time of contribution, and the best evi’86 Code.) dence of the fair market value at that time is the Rev. Rul. 69-102, 1969-1 C.B. 32. price at which similar lots of bibles are being sold to others. §1.170A-1. (Sec. 170, ’86 Code.) 80.111 Equity in timber sale. Taxpayer transRev. Rul. 80-233, 1980-2 C.B. 69. ferred to charity an equity interest in standing timber which he sold as agent for himself and the 80.119 Fair market value; bibles. A promoter charity, at its request, with the buyer paying the offers investors a choice of two plans to purchase charity directly for its interest. Held, the transfer bibles and donate them to charities. Under one was a valid gift, not an anticipatory assignment of plan, investors purchase the bibles and donate income. (Sec. 61, ’86 Code.) them to charity 12 months later, The investors are Stuart A. Rogers, 38 T.C. 785, Nonacq., 1963-2 told that they may deduct the “retail” price, which is three times as high as the purchase price. Under C.B. 6. the other plan, investors purchase the bibles at the “retail” price, put down the same amount as the 80.112 Estates; charitable bequest paid from corpus. Amounts bequeathed to a charity that are purchase price in the first plan and execute prompaid out of the corpus of an estate pursuant to state issory notes for the balance. Principal and interest law are not deductible as charitable contributions on the notes is payable in 12 years. The investors nor allowable as distribution deductions to benefi- then donate the bibles to charity. The deduction in Charitable contributions tributions from a participating family that exceed the fair market value of services received from the program deductible. are §§1.170A-1. 1.501(c)(3)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 80-286, 1980-2 C.B. 179. 80.127 Foundation; loans to creator and controlled corporations. Taxpayers created a charitable foundation which, in addition to making contributions to religious and charitable organizations, made loans for noncharitable purposes to taxpayers and others. Held, contributions to the foundation were deductible. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Donald G. Griswold, 39 T.C. 620, Acq., 1965-1 C.B. 4. 80.128 Fraternal organization building fund. Contributions to a building fund of a fraternal organization are not deductible where the building is to be used for the organization’s fraternal activities even though some of the activities of the organization may be of a charitable nature. (Sec. 170, ’86 Code.) Rev. Rul. 56-329, 1956-2 C.B. 125. 80.129 Fund-raising organization. Contributions to an exempt organization whose principal purpose and function is the raising of funds needed by public agencies and hospitals for the care of crippled children and which also, as a secondary activity, operates a medical treatment center, do not qualify for the additional deduction provided by section 170(b)(1)(A). §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 59–27, 1959-1 C.B. 57. 80.130 Funds transferred for investment; retained right to income. A taxpayer who transfers funds to a charitable organization for investment with income required to be accumulated until he is age 65 and then paid to him for life and then to his wife for life has made a deductible charitable contribution to the organization. The amount of the contribution is determined by multiplying the sum transferred by the appropriate actuarial factor. Prior to the taxpayer’s attainment of age 65, or prior to the taxpayer’s wife attaining age 65 should the taxpayer predecease her, no income for the invested funds will be taxable to them. §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 69–312, 1969–1 C.B. 64. expenses directly connected with the hosting of a governors’ conference is deductible as a charitable contribution but the value of merchandise presented to the visiting governors and their wives as personal mementos is not deductible. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 69-459, 1969-2 C.B. 35. 80.135 Health care organizations; medicare and medicaid payments exempt functions. Medicare and medicaid payments constitute gross receipts derived from the exercise or performance of a health care organization’s exempt activities for purposes of the support test of sections 170(b)(1)(A)(vi) and 509(a)(2). §§1.170A-1, 1.509(a)-3. (Secs. 170, 509; ’86 Code.) Rev. Rul. 83-153, 1983-2 C.B. 48. 80.136 Highway safety program. Amounts paid to a State Department of Highway Safety for use in developing a highway safety program constitute allowable deductions. §§39.23(o)-1, 39.23(q)–1. (Secs. 23(o). 23(o). ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 54-532, 1954-2 C.B. 93. 80.137 Home for aged; life care payment. A taxpayer may not claim a charitable contribution deduction for any part of a lump sum payment made to a religious home for the aged for the care of his father where such payment is based on the life expectancy of his father and he dies within his life expectancy. However, he may be entitled to a dependency exemption for his father. (Sec. 170, ’86 Code.) Rev. Rul. 58-303, 1958-1 C.B. 61. 80.138 Homeowners association. A nonprofit organization formed to preserve the architecture and appearance of a housing development, and to own and maintain common green areas, streets, and sidewalks for use of all the development residents qualifies for exemption; however, contributions to the organization are not deductible. Rev. Rul. 69-280 distinguished. §§1.170-2, 1.501(c)(4)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 72-102, 1972-1 C.B. 149. 80.139 Honorarium; transferred to educational organization. The amount of an honorarium payable to an elected federal official, but transferred at the official’s request to an educational organization selected by the payer from a list of five charitable organizations provided by the official, is includible in gross income under section 61, even though treated as not being accepted by the official for purposes of 2 U.S.C. 44li. However, the amount is deductible as a charitable contribution subject to the limitations of section 170.§§1.61–2, 1.170A-1. (Secs. 61, 170; ’86 Code.) Rev. Rul. 79-121, 1979-1 C.B. 61. 80.140 Hospital association; use by donor’s employees. Payments by a corporation to a hospital association, under an agreement which furnished the taxpayer with particular rights and interests for its employees for a period of ten years in certain properties and facilities of a hospital to be constructed, are not deductible as charitable contributions or as business expenses, but constitute capital expenditures. §§39.23(a)-1, 39.23(q)-1, 39.24(a)-2. (Secs. 23(a), 23(q), 24(a), ’39 Code; Secs. 162, 170, 263, ’86 Code.) Rev. Rul. 55-616, 1955-2 C.B. 545. 80.141 Improvements to Government-owned housing. The amount expended by a tenant for additions or improvements to Government-owned housing is not deductible as a charitable contribtrtion. Such amount represents a nondeductible personal, living or family expense. §§1.170–1, 1.262-1. (Secs. 170, 262; ’86 Code.) Rev. Rul. 67-14, 1967-1 C.B. 61. 80.142 Inaugural Committee. A donation to a Presidential inaugural Committee that sponsors inaugural activities some for which are open to the public and some by invitation only is neither a charitable contribution deductible as a gift “to or for the use of” the U.S. for “exclusively” public purpose under section 170(c)(1) nor a contribution deductible to an organization operated exclusively for charitable purposes under section 170(c)(2). §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 77–283, 1977-2 C.B. 72. 80.143 Income interest; participation fund. The method of reporting contributions of money and property made to an income participation fund of an exempt organization where payments from the net income of the fund are to be made to the contributors or to the contributors and their designated coparticipants during lives. their §39.23(o)-1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 55–275, 1955–1 C.B. 295. 80.144 Indian tribal governments; treated as states or political subdivisions. Rev. Rul. 58-610, Rev. Rul. 68-231 and Rev. Rul. 74-170 are suspended as to their respective applications to Indian tribes, or subdivisions thereof during the specified two years under section 7871 of the Code. §§1.61-7, 1.103-1, 1.170A-1, 305.7871-1. (Secs. 61,103,170, 2055, 4041,4221, 4253, 4483, 7871; ’86 Code.) Rev. Rul. 84–93, 1984–1 C.B. 279. 80.145 Industrial commission. An industrial commission, established by a state legislature to study the problems of industrial life in a particular geographic area, is composed of representatives appointed by elected officials from each participating mumcipality, and is authorized to provide for the housing of industries, acquire land, borrow money, sell property, issue revenue bonds, and establish a per capita assessment. Its activities are subject to review by the state and member municipalities. Amounts contributed to the commission are deductible contributions. charitable §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 79-323, 1979-2 C.B. 106. 80.146 Influencing legislation. A deduction is not allowable for amounts paid to an organization exempt from tax under section 501(c)(3) and described in section 170(c)(2) that are earmarked for use in, or in connection with, influencing specific legislation. §§1.170A-1, 1.501(a)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 80-275, 1980-2 C.B. 69. 80.147 Installment notes credited as gifts. An installment basis taxpayer is taxable on installment notes due from the sale of realty to an exempt educational organization when the notes are credited to the organization as gifts; however, the fair market value of each note as of the date it is credited as a gift will constitute an allowable charitable deduction. §§39.23(0)-1, 39.44-5. (Secs. 23(o), 44, ’39 Code; Secs. 170,453, ’86 Code.) Rev. Rul. 55–157, 1955-1 C.B. 293. 80.148 Insurance policy; assigned to charitable foundation. A corporation that assigns to a charitable organization life insurance policies payable to itself or its successors or assigns on the same day that initial premiums were paid, may deduct an amount equal to the initial premium as a charitable contribution. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 58–372, 1958–2 C.B. 99. policy; 80.149 Insurance irrevocably assigned to college. The irrevocable assignment of the cash surrender value of a life insurance policy to a college with the donor retaining the right to designate the beneficiary and to assign the balance of the policy, whether the policy is paid-up and the college is given possession or the policy is nonpaid-up and the donor retains possession, 80.131 Future interest in tangible personal property. A charitable contribution consisting of a future interest in tangible personal property made before July 1, 1964, is deductible at the time the gift is made where the deed of gift or other instrument of transfer contains a provision which provides for the forfeiture or termination of the reserved life interest on its termination or attempted alienation. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 65–20, 1965–1 C.B. 124. 80.132 Gifts to city; relocation of railroad facilities. Contributions and gifts to a city to be used to provide railroad companies with substitute facilities in consideration for removing their tracks and stations from the central portion of the city and relinquishing their right-of-way through the city are deductible as charitable contributions. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 67-446, 1967-2 C.B. 119. 80.133 Government educational organizations and hospitals. Contributions to governmental instrumentalities for the expansion, development or creation of government operated educational organizations and hospitals qualify for the additional charitable deduction. (Sec. 170, ’86 Code.) Rev. Rul. 55–453, 1955–2 C.B. 54. 80.134 Governors’ Money conference. donated to a State by an individual to defray Charitable contributions constitutes a charitable contribution of a partial interest under section 170(f)(3) for which a deduction is not allowable. A deduction is likewise not allowable for the amount of the increase in cash surrender value attributable to the annual premium paid by the donor on the nonpaid-up policy. Rev. Ruls. 69–79 and 69–215, to the contrary, revoked for gifts made after July 31, 1969. §1.170A-7. (Sec. 170, ’86 Code.) Rev. Rul. 69-79, 1969-1 C.B. 63; Rev. Rul. 69-215, 1969-1 C.B. 63; Rev. Rul. 76-143, 1976-1 C.B. 63. 80.150 Intangible drilling and development cost property. The taxpayer donated to an educational institution certain items obtained in the course of drilling oil and gas wells. The items come within the definition of ordinary income property in section 1.170A-4(b)(1). The taxpayer previously deducted the costs of obtaining the items as intangible drilling and development costs and has a zero basis in them. Therefore, the taxpayer’s charitable contribution deduction is zero. §§1.170A-4, 1.612-4, 1.1212-1, 1.1231-1. (Secs. , 170, 612, 1221, 1231; ’86 Code) Rev. Rul. 82-9, 1982-1 C.B. 39. 80.151 Interests in property; easement of beachfront property to county.A taxpayer who contributed an easement in perpetuity in a 50 acre tract of vacant beachfront property to a county, retaining mineral rights, the right of access to open water, and usable channel through the property to adjacent land, and who remains responsible for property taxes, levies, and assessments, has contributed an open space easement and is entitled to a charitable contribution deduction for the value of the restricted easement. §1.170A-7. (Sec. 170, ’86 Code.) Rev. Rul. 75-373, 1975-2 C.B. 77. 80.152 Interests in property; effect on earnings and profits. The Service will not follow the Jacob M. Kaplan decision concerning a corporation that makes a charitable contribution of appreciated property. The corporation may reduce its current earnings and profits only by the adjusted basis of the donated property, even though in computing its taxable income it may deduct an amount equal to the property’s fair market value. §§1.170A-1, 1.312-1. (Secs. 170, 312; ’86 Code.) Rev. Rul. 78-123, 1978-1 C.B. 87; Jacob M. Kaplan, 43 T.C. 580, Nonacq., 1978-1 C.B. 2. 80.153 Interests in property; open space easement. An individual who granted a 30-foot wide open space easement in gross in perpetuity along the edge of his property, a capital asset held more than SIX months, to a foundation described in section 170(c)(2) that was not a private foundation described in section 509(a), may deduct the fair market value of the easement to the extent and manner provided under section 170. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 74-583, 1974-2 C.B. 80. 80.154 Interests in property; open space easement; valuation. A gratuitous contribution of an open space or scenic easement in perpetuity without expectation of economic benefit to the donor is a deductible charitable contribution and, if not separately and distinctly valued, the value of the gift may be determinable according to the “before and after” approach. Clarified by Rev. Rul. 76-376. §1.170A-1 (Sec. 170, ’86 Code.) Rev. Rul. 73-339, 1973-2 C.B. 68. 80.155 Interests in property; open space easement; valuation. The fair market value of an open space easement in perpetuity in a portion of a taxpayer’s land, granted to a charitable organization described in section 170(c), is the difference between the fair market value of the entire tract of land before and after the granting of the easement. The fair market value of the taxpayer’s remaining interest in the land encumbered by the easement subsequently conveyed in fee to another charitable organization is the fair market value of the actual land conveyed. Rev. Rul. 73–339 clarified. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 76-376, 1976-2 C.B. 53. 80.156 Interests in property; retained life estate; leased farmland.A retired farmer, a portion of whose farm is leased to an unrelated third party, may deduct as a charitable contribution a gift not in trust to an exempt educational organization of an irrevocable unrestricted remainder interest in a portion of the leased land in which the farmer retains a life estate. §1.170A-7. (Sec. 170, ’86 Code.) Rev. Rul. 78-303, 1978-2 C.B. 122. of section 170(f)(3)(B)(i) and (ii) and may be deducted as a charitable contribution. §1.170(A)-7. (Sec. 170, ’86 Code.) Rev. Rul. 75-420, 1975–2 C.B. 78. 80.163 Involuntary conversion; replacement property. Gain previously unrecognized upon the involuntary conversion of a taxpayer’s property will not be recognized upon the contribution of the replacement property to a charitable organization. §1.1033(a)-1. (Sec. 1033; ’86 Code.) Rev. Rul. 68-292, 1968-1 C.B. 359. 80.164 Joint bank account of two exempt organizations. Contributions to the joint bank account of two qualified exempt organizations engaged in a joint fund raising campaign are con80.157 Interests in property; retained min- sidered to have been made to the organizations and eral or lease rights. The donation of real property are, therefore, subiect to the additional ten percent to a charitable organization with the donor retain- deduction. §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 66-304, 1966-2 C.B. 98. ing the mineral rights, including the sole right to exploit and sell the minerals obtained, or the donor retaining a lifetime interest in payments due under 80.165 Limitation; health care service; home a 60-year timber lease executed the previous year treatment. An exempt organization primarily is not a contribution of an undivided portion of the providing health services to sick persons in their donor’s entire interest in the property and no own homes under the direction of their private deduction therefor is allowable. §1.170A-1. (Sec. physicians and providing only incidental patient treatment at the organization’s office, which is not 170, ’86 Code.) equipped to serve as an outpatient facility on a Rev. Rul. 76-331, 1976-2 C.B. 52. continuing basis, does not qualify as a hospital as 80.158 Interests in property; retained right to defined in section 170(b)(j)(A)(iii). §1.170A-9. use. The contribution of a tract of land to the U.S. (Sec. 170, ’86 Code.) Rev. Rul. 76-452, 1976-2 C.B. 60. by an individual who retained the right during his lifetime to train his personal hunting dog on the 80.166 Limitation; installment note. A contrails extending over-the entire tract is deductible. tribution to a charitable organization of an install§1.170A-7. (Sec. 170, ’86 Code.) ment note that was obtained as a result of a section Rev. Rul. 75-66, 1975-1 C.B. 85. 453 installment sale of section 1231 property is an 80.159 Interests in property; retained timber allowable deduction subject to the 50 percent or mineral rights. A gift of timber land to a chari- limitation contained in section 170(b)(1)(A) and is table organization for transfer to the U.S. for use not subject to the special limitations of section 170(b)(1)(D). §1.170A-1. (Sec. 170, ’86 Code.) as a wildlife preserve is not disallowed under secRev. Rul. 74-336, 1974-2 C.B. 80. tion 170(f)(3)(A) by the grantor’s retention of mineral or timber rights that can be exercised only 80.167 Limitation; net income redetermined. upon the remote possibility of approval of the Where a corporation’s net income has been redeGovernment. §1.170A-1. (Sec. 170, ’86 Code.) termined, due to renegotiations of Government Rev. Rul. 77-148, 1977-1 C.B. 63. contracts, the charitable deduction is limited to 80.160 Interests in property; scenic easement five percent of net income after renegotiation. I.T. (Sec. 170, to state. An enforceable easement in perpetuity, 3733 superseded. §1.170-3. C.B. 96. ’86 Code.) Rev. Rul. 71-78, 1971-1 contributed to a state by the owner of a mansion declared to be a state landmark, restricting the 80.168 Limitation; remainder trust; alterright of the owner to subdivide, mine, or indus- nate beneficiary. A taxpayer created a charitable trially develop the property or to alter the appear- remainder trust with the remainder interest payance or modify the architectural characteristics of able to a public university described in section the residence, is a scenic easement and an open 170(b)(1)(A)(ii) and (c)(2)(B). The trust instruspace easement within the meaning of reg. ment provides that if the university is not an orga1.170A-7(b)(1)(ii). The owner is entitled to a char- nization described in section 170(c) when the trust itable contribution deduction in the manner and to is to be distributed, the trustee will then select a the extent provided in section 170 of the Code for beneficiary described in section 170(c). The possithe fair market value of the easement. §1.170A-7. bility that the remainder will not go to an organiza(Sec. 170, ’86 Code.) tion described in section 170(b)(1)(A) is so remote Rev. Rul. 75-358, 1975-2 C.B. 76. as to be negligible, and the 50 percent limitation is applicable with respect to the taxpayer’s transfer 80.161 Interests in property; undivided por- to the trust. §§1.170A-8, 1.664-1. (Secs. 170, 664; tion. Application of reg. 1.170A-7(b)(1) with ’86 Code.) respect to contributions made before October 4, Rev. Rul. 80-38, 1980-1 C.B. 56. 1972, of an undivided portion of a donor’s entire interest in property. §1.170A-7. (Sec. 601.105, 80.169 Limitation; school, church, or hospiS.P.R.; Sec. 170, ’86 Code.) tal as secondary activity. Contributions to an Rev. Proc. 72-45, 1972-2 C.B. 826. organization whose activities are educational, religious, or charitable in the broad sense of those 80.162 Interests in property; undivided por- words, and which maintains a school, church, or tion. A taxpayer contributed improved real prop- hospital as a secondary or incidental activity qualerty, used only for summer vacations, to an orga- ify as a deduction only to the extent of the 20 pernization described in section 170(c)(2). The deed cent limitation. Rev. Rul. 55–219 revoked. (Sec. of gift reserved to the donor the right to free and 170, ’86 Code.) exclusive use of the property each summer and to Rev. Rul. 56-262, 1956-1 C.B. 131. store personal belongings in the main residence year-round, and prohibited the organization from 80.170 Limitation; support received from making changes to the property without the publicly supported churches. The two percent donor’s consent and conveying the property until limitation prescribed by reg. 1.170A-9(e)(6)(i) the later of the donor’s death or 10 years after the does not apply to the support received by an gift. The contribution qualifies as a gift of a exempt organization described in section remainder interest in a personal residence and an 170(c)(2) from individual churches described in undivided interest in property within the meaning section 170(b)(1)(A)(i) that are publicly sup- Charitable contributions ported and entitled to section 170(b)(1)(A)(vi) status. §1.170A-9. (Sec. 170, ’86 Code.) Rev. Rul. 78-95, 1978-1 C.B. 71. 80.171 Limitation; voluntary association of counties. Contributions to a voluntary association of counties separate from, but qualifying as a wholly owned instrumentality of, its member counties and organized and operated exclusively for public purposes will not qualify for the 50 percent limitation under section 170(b)(1)(A) but are deductible charitable contributions subiect to the 20 percent limitation of section 170(b)(1)(B). §1.170A-8. (Sec. 170, ’86 Code.) Rev. Rul. 75–359, 1975–2 C.B. 79. 80.172 Locomotive transferred to municipality; trust relationship. A railroad transferred a retired locomotive pursuant to an agreement whereby the locomotive would be held in trust by a civic association for public display as an historical exhibit in a city park, Held, the railroad is entitled to a charitable deduction for the transfer. (Sec. 170, ’86 Code.) Denver and Rio Grande Western Railroad Co., 38 T.C. 557, Acq., 1963-1 C.B. 4. 80.173 Lodging and transportation acquired by barter. A radio station that donates to an agency of the U.S. Government its right to use of lodging and transportation acquired from hotels and airlines in exchange for radio advertising time may deduct, under section 170, the fair market value of the rights donated, Rev. Ruls. 57-462 and 67-236 distinguished. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 841, 1984-1 C.B. 39. 80.174 Lump sum payment; organization acting as agent. Contributions to national voluntary health agencies made, in a lump sum and with designated specific amounts for agencies of the donor’s choice, to an organization soliciting contributions in Federal offices are deductible. (Sec. 170, ’86 Code.) Rev. Rul. 57-287, 1957–2 C.B. 157. 80.175 Marriage seminar. Participants in a weekend marriage seminar conducted by a charitable organization are not entitled to a charitable contribution deduction for any part of a donation made to the organization at the conclusion of the seminar unless the participants establish that the amount donated exceeds the monetary value of all benefits and privileges received and that the amount claimed as a charitable contribution is the amount of such excess. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 76-232, 1976-1 C.B. 62. 80.176 Medical research organization; profit-making hospital. The additional ten percent deduction is not applicable to contributions made to a medical research organization which operates in conjunction with a hospital operated for profit. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul 66–245, 1966–2 C.B. 71. 80.177 Membership dues. Membership dues, paid to a charitable organization, which do not entitle the member to any benefits or privileges in return, are deductible as charitable contributions; however, where the payment entitles the member to certain benefits or privileges, such dues are not deductible as charitable contributions, but may represent a deductible business expense. Modified by Rev. Rul. 68–432 to indicate that the payment of such dues is deductible as a charitable contribution to the extent the payment exceeds the monetary value of the benefits and privileges available by reason of such payment. §§39.23(a)-5, 39.23(o)-1, 39.23(q)-1. (Secs. 23(a), 23(o), 23(q), ’39 Code; Secs. 162, 170, ’86 Code.) Rev. Rul. 54-565, 1954-2 C.B. 95. 80.178 Membership dues. Guides are presented for determining whether membership dues paid to an organization described in section 170(c)(2) may be deducted, in whole or in part, as a charitable contribution. Rev. Rul. 54–565 modified. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 68-432, 1968-2 C.B. 104. 80.179 Membership dues; portion distributed to charity. The portion of membership dues marked for distribution to qualified charities and paid to a social club’s treasurer, who is also the authorized agent of the donee organizations, is deductible by the payor as a charitable contribution when paid to the treasurer. However, if the treasurer were not an agent of the charitable organizations, the contributions would be deductible only in the year actually transferred to the donee organizations. §39.23(o)-1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 55–192, 1955-1 C.B. 294. tion in any amount is made. §§1.170–2, 1.172–1. (Secs. 170, 172; ’86 Code.) Rev. Rul. 64-172, 1964-1 (Part 1) C.B. 118. 80.185 Newspaper space. A donation of space by a newspaper to an organization to which charitable contributions can be made is not a gift of property but is a rendition of services. The fair market value of the donated space does not qualify as a deductible contribution or gift of property. (Sec. 170, ’86 Code.) Rev. Rul. 57-462, 1957–2 C.B. 157. 80.186 Numismatic society performing educational activities. The additional deduction of ten percent of adjusted gross income does not apply to the charitable contributions or gifts made by individuals to an organization where its principal purpose and functions are devoted to the collection and preservation of coins and medals, with secondary activities consisting of the furtherance of the organization’s educational aims in graduate and post-graduate study of numismatics 80.180 Military Affiliate Radio System; out- and related fields. Distinguished by Rev. Rul. of-pocket expenses. Unreimbursed out-of-pocket 81-79. (Sec. 170, ’86 Code.) expenses incurred by a civilian ham operator in Rev. Rul. 58-433, 1958-2 C.B. 102. operating his radio equipment as a volunteer member of the supplemental program of the Military 80.187 Oil, gas, and minerals in place; reverAffiliate Radio System (MARS), an organization sionary interest. A transfer by deed of oil, gas and of military radio stations and facilities established minerals in place to a church until it received a at U.S. Army and Air Force. installations, are stated sum from production was a gift, and its fair deductible as charitable contributions or gifts. market value at transfer was a deductible contribution in the year transferred even though payments §1.170-2. (Sec. 170, ’86 Code.) were not available until the following year. (Sec. Rev. Rul. 67-364, 1967-2 C.B. 120. 23(o), ’39 Code; Sec. 170, ’86 Code.) Lester A. Nordan, 22 T.C. 1132, Acq. in result, 80.181 National Guard. A National Guard offi1959-1 C.B. 4. cer is not entitled to an expense deduction for expenditures for maintaining morale, entertaining 80.188 Oil and gas lease; overriding royalty prospective members, etc., which have not been or net profits interest. The owner of a working authorized as a regular expense payable by the interest under an oil and gas lease is not entitled to U.S. Army. Expenditures made in compliance with Army regulations respecting the making of a charitable contribution deduction under section 170(a) of the Code for the contribution of an overcontributions to company funds, if such expenses riding royalty interest or a net profits interest. are incurred for exclusively public purposes, are §1.170A-7. (Sec. 170, ’86 Code.) deductible under section 23(o)(1) of the ’39 Code. Rev. Rul. 88-37, 1988-1 C.B. 97. §39.23(a)-1. (Sec. 23(a), ’39 Code; Sec. 162, ’86 Code.) 80.189 Oil and gas lease; undivided interest. Rev. Rul. 55-201, 1955-1 C.B. 269. The fair market value of an undivided interest in oil and gas leases donated to a charitable organiza80.182 National war veterans organization; tion is deductible by the donor and is not includable endowment fund. Contributions to an endowin his gross income, nor is the amount of the conment fund established by an exempt national war tribution reduced by the intangible drilling and veterans organization for the care of disabled war development costs previously deducted by the veterans or orphans of war veterans, some of donor. §1.170-1. (Sec. 170, ’86 Code.) whom may be members of the organization, may Rev. Rul. 59–196, 1959–1 C.B. 56. be deducted as charitable contributions. I.T. 2139 80.190 Oil pollution control fund. Voluntary superseded. §1.170A-1. (Sec. 170, ’86 Code.) contributions to a city’s special oil pollution conRev. Rul. 73–14, 1973-1 C.B. 117. trol fund used for research, beautification, and 80.183 Net operating loss carryover; effect of advertising to recover tourist business lost due to contribution carryover. In computing its net oil pollution and that is commensurate with the expected financial return are not deductible as operating loss carryover to the following year, a charitable contributions but are deductible as busicorporation is required to take into account charitable contributions carried over from the preced- ness expenses by a corporation conducting a retail ing year and combine them with the charitable business in the city. Rev. Rul. 69–90 distincontributions actually made during the current guished. §§1.162-15, 1.170A-1. (Secs. 162, 170; year. However, the contributions so taken into ’86 Code.) Rev. Rul. 73–113, 1973–1 C.B. 65. account can not be carried over to the following year since they served to reduce the taxable 80.191 Oklahoma Educational Television income for the current year and thereby increased Authority. Contributions or gifts to the Oklahoma the net operating loss carryover. §§1.170A-11, Educational Television Authority, an instrumen1.172-5. (Secs. 170, 172; ’86 Code.) tality of Oklahoma, are deductible. §§39.23(o)-1, Rev. Rul. 76-145, 1976-1 C.B. 68. 39.23(q)-1. (Secs. 23(o), 23(q), ’39 Code; Sec. 170, ’86 Code.) 80.184 Net operating loss carryover taken Rev. Rul. 54-11, 1954-1 C.B. 64. into account. For purposes of the unlimited charitable contribution deduction for certain individu- 80.192 Option granted on real property; year als under section 170(b)(l)(C), (1) a net operating deductible. An individual who grants an option on loss deduction for a taxable year attributable to net real property to a charitable organization is operating loss carryovers is taken into account in allowed a charitable deduction for the year in determining taxable income with respect to such which the organization exercises the option in the year; and (2) the ninety percent of taxable income amount of the excess of the fair market value of the requirement will be satisfied if in any of the eight property on the date the option was exercised over of the ten preceding years in which taxable income the exercise price. §1.170A-1. (Sec. 170, ’86 computed in accordance with such section is Code.) Rev. Rul. 82-197, 1982-2 C.B. 72. reduced to or below zero and a charitable contribu- Charitable contributions 80.193 Organization for maintenance of exclusive private community. Contributions to a nonprofit organization that provides care and maintenance for an exclusive private residential community are not deductible as charitable contributions. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 68-485, 1968-2 C.B. 107. 80.194 Organization promoting legislation for humane treatment of animals.An organization operated for the prevention of cruelty to animals, exempt under section 501(c)(4), is not exempt under section 501(c)(3) if it substantially engages in promoting legislation for the humane treatment of animals, even though the legislation it advocates may be beneficial to the community, and even though most of its attempts to influence legislation may be indirect. Contributions to it are not deductible. §§1.170-2, 1.501(c)(3)-1, 1.501(c)(4)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 67–293, 1967-2 C.B. 185. 80.195 Organization to improve welfare of research animals. Deductible contributions made by individuals to a qualified charitable organization whose primary purpose is to improve the welfare of animals held for medical research are limited to 20 percent of the donor’s adjusted gross income. §1.170–2. (Sec. 170, ’86 Code.) Rev. Rul. 58–263, 1958–1 C.B. 146. 80.196 Pacific War Memorial Commission. Contributions, gifts, legacies, bequests, devises, or transfers to the Pacific War Memorial Commission, an agency of the Territory of Hawaii, are deductible. §§39.23(o)-1, 39.23(q)-1. (Secs. 23(o), 23(q), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 54-220, 1954-1 C.B. 65. 80.197 Paid as condition of probation. An amount paid to a charitable organization in satisfaction of a condition of probation imposed by a federal district court is not paid gratuitously and is not deductible under section 170. §§1.162–21, 1.170-1. (Secs. 162, 170; ’86 Code.) Rev. Rul. 79-148, 1979-1 C.B. 93. 80.198 Partnership interest; unrealized receivables. A transferor by way of a charitable contribution of an interest in a partnership appurtenant to which is a right to share in unrealized partnership income reflected in partnership installment obligations, is allowed a deduction as a charitable contribution of the fair market value, as of the date of the transfer, of that portion of the partnership interest which is exclusive of the installment obligations receivable and is regarded as a capital asset, and the fair market value, as of such date, of the partnership installment obligations regarded as disposed of in the transfer. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 60-352, 1960-2 C.B. 208. 80.201 Payment after close of taxable year. Where, during the taxable year, a board of directors authorized a contribution, and such contribution was paid after the close of the taxable year and on or before the fifteenth day of the third month following the close of the taxable year, an election may be made in its return by an accrual basis corporation to treat all or only a portion of the contribution as paid during the taxable year. (Sec. 23(q), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 57-228, 1957-1 C.B. 506. 80.209 Plans for Progress; Vocational Guidance Program. Contributions made to Plans for Progress for its Vocational Guidance Program are deductible as contributions for the use of the U.S. for exclusively public purposes. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 67-298, 1967–2 C.B. 111. 80.210 Pledge. Under certain circumstances, a taxpayer may be permitted the “special deduction” for contributions, even though his contribution is not made direct to an organization of the type specified in section 170(b)(1)(A), as where a 80.202 Payment to city for parking facilities; merchants and property owners. Voluntary pay- check is made payable to such an organization but ments by merchants and property owners to a city delivered to a fund-raising foundation in satisfacto provide unrestricted public parking facilities in tion of a pledge. (Sec. 170, ’86 Code.) Rev. Rul. 55-1, 1955–1 C.B. 26. the general area of the businesses and properties of the contributors are charitable contributions. Dis- 80.211 Pledge; satisfied with appreciated or tinguished by Rev. Rul. 73–113. §1.170-1. (Sec. depreciated property. The satisfaction of a 170, ’86 Code.) pledge to an organization described in section Rev. Rul. 69-90, 1969-1 C.B. 63. 23(o) of the ’39 Code by means of a donation or gift of property which has either appreciated or 80.203 Payment to pension fund adminis- depreciated in value does not give rise to a gain or tered by church; clergymen. Payments made by loss. Such contribution is deductible to the extent clergymen to a pension fund administered by a of the fair market value at the time of the contribuchurch for their benefit, or for the benefit of their tion or gift. Note: For taxable years beginning after widows and dependent children, are not deduct1969, see §201, Pub.L. 91–172, 1969-3 ible as charitable contributions to the church, Such §39.23(o)-1. (Sec. 23(o), ’39 Code; Sec.C.B. 45. 170, ’86 payments constitute nondeductible personal Code.) expenses. §1.170–1. (Secs. 170, 262; ’86 Code.) Rev. Rul. 55–410, 1955-1 C.B. 297. Rev. Rul. 58-264, 1958-1 C.B. 144. 80.204 Payments to charitable organizations by travel agent. A travel agent regularly transacted a substantial business with tax exempt organizations. Rather than promote such business through salesmen and advertising, the agent made voluntary annual cash payments to the organiza tions based on the amount, character and profitability of their business.Held, the payments were made solely for business purposes; the limitation on charitable deductions did not preclude deductibility in full as a business expense. (Secs. 162, 170; ’86 Code.) Sarah Marquis, 49 T.C. 695, Acq., 1971-2 C.B. 3. 80.205 Payments to TRANSPO. Payments to the 1972 U.S. Transportation Exposition (TRANSPO) maybe deductible as charitable contributions or as a business expense, depending upon the facts and circumstances in each case. §§1.162-15, 1.170-3. (Secs. 162, 170; ‘86 Code.) Rev. Rul. 72-293, 1972-1 C.B. 95. 80.212 Pledged securities donated to charitable organization. A donation to a charitable organization of appreciated securities, which have been held for more than six months and are pledged as collateral for an outstanding loan that is in excess of the donor’s basis, constitutes partly a sale and partly a gift. Therefore, the donor realizes a long-term capital gain of the difference between the amount of the loan and his basis in the securities. He is also entitled to a charitable contributions deduction in the amount of the excess of the fair market value of the securities over the loan. §§1.61–6, 1.170-1, 1.1001–1. (Secs. 61, 170, 1001; ’86 Code.) Rev. Rul. 70-626, 1970-2 C.B. 158. 80.213 Police department; reward money contributed by murder victim’s parent.A contribution of reward money by a parent of a murdered individual to the police department of a political subdivision for information leading to the conviction of the murderer is for exclusively public purposes and is deductible under section 170. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 81-307, 1981-2 C.B. 78. 80.214 Political campaign funds transferred to U.S. Government. The transfer to the U.S. Government of unexpended political funds impractical to be returned to the contributors, by a campaign committee organized and operated to influence the election of an individual to a Federal public office, is an expenditure to carry out the purpose of the committee and not a diversion for the personal benefit of the candidate or other person. Such transfer does not give rise to gross income to the candidate, committee, or any of its members; is not subject to the gift tax; and does not entitle tbe candidate, committee, or any of its members, or any contributor to a charitable contribution deduction. Rev. Rul. 71–449 clarified. §§1.61-1, 1.170A-1. (Secs. 61, 170; ’86 Code.) Rev. Rul. 74-22, 1974-1 C.B. 16. 80.215 Pooled income funds; sample forms. The purpose of this revenue procedure is to make available a sample form of declaration of trust and instruments of transfer that meet the requirements for a pooled income fund as described in section 642(c)(5). §§1.170A-6, 1.642c-5. (Sec. 601.201, S.P.R.; Secs. 170, 642, 2055, 2522, ’86 Code.) Rev. Proc. 88-53, 1988-2 C.B. 712. 80.216 Portrait fund. Contributions to a fund formed solely to acquire and display a portrait of 80.206 People-to-People Program. Contributions made to certified committees organized to carry out the “People-to-People Program” sponsored by the United States Government and outof-pocket expenses incurred by individuals in rendering services for the promotion of such committees are deductible charitable contributions. Supplemented to certify certain committees for designated taxable years by Rev. Rul. 65-288, 80.199 Patent interest. The fair market value of 1965-2 C.B. 55; Rev. Rul. 66-202, 1966-2 C.B. an interest in a patent donated to a tax-exempt 70; Rev. Rul. 66-244, 1966-2 C.B. 71; Rev. Rul. organization by the owner of the patent is deduct- 67-324, 1967-2 C.B. 112. §1.170-1. (Sec. 170, ible as a charitable contribution in the taxable year ’86 Code.) such property is transferred. Any royalties paid to Rev. Rul. 57-38, 1957-1 C.B. 96. the tax-exempt organization as a result of the transfer constitutes income to the organization. 80.207 People-to-People Program; foreign (Sec. 170, ’86 Code.) travel tours. Expenses incurred on foreign travel Rev. Rul. 58-260, 1958-1 C.B. 126. tours sponsored by travel agencies are not deductible as contributions to or for the use of the U.S. in 80.200 Payment after close of tax year; elec- exclusively advancing the “People-to-People tion. An accrual method corporation made a Program”. §1.170-1. (Sec. 170, ’86 Code.) proper election to deduct a charitable contribution Rev. Rul. 64-216, 1964-2 C.B. 63. authorized by the board of directors during the tax year and paid within 2 1/2 months after the close 80.208 Pew rents; building fund assessments; of the tax year even though the corporation failed periodic dues. Pew rents, building fund assessto attach to the tax return the declaration and reso- ments, and periodic dues are methods of making lution required by reg. 1.170-3(b). (Sec. 170, ’86 contributions to a church and are deductible as charitable contributions. A.R.M. 2 superseded. Code.) Columbia Iron & Metal Co., 61 T.C. 5, Acq., §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 70-47, 1970-1 C.B. 49. 1979-2 C.B. 1. Charitable contributions a judge in the courthouse of a political subdivision are deductible under section 170. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 81-219, 1981-2 C.B. 77. racially discriminatory 80.217 Private schools. Private schools that practice racial discrimination do not qualify as tax-exempt organizations under section 501(c)(3). Contributions to such schools are not deductible under section 170. (Secs. 170, 501; ’86 Code.) Bob Jones University, 461 U.S., Ct. D. 2018, 1983-2 C.B. 80. 80.218 Public park. Contributions made to a committee to be used in developing land donated to a political subdivision as a public park are deductible by the donor. §§39.23(o)-1, 39.23(q)–1. (Secs. 23(o), 23(q), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 54-466, 1954-2 C.B. 93. 80.219 Public recreation facilities. A nonprofit corporation organized to establish, maintain, and operate a public swimming pool, playground and other recreation facilities for community residents is tax-exempt and contributions thereto are deductible as charitable contributions. §1.501(c)(3)-1. (Sec. 23(o), ’39 Code; Secs. 170, 501, ’86 Code.) Rev. Rul. 59–310, 1959-2 C.B. 146; Isabel Peters, 21 T.C. 55, Acq., 1959-2 C.B. 6. 80.220 Publicly-supported organization. A section 501(c)(3) organization, under the facts presented, is a publicly-supported organization referred to in section 170(b)(1)(A)(vi) of the Code; contributions made to it are subject to the additional ten-percent charitable deduction and to the five-year carryover provisions. §1.170–2. (Sec. 170, ’86 Code.) Rev. Rul. 68-355, 1968-2 C.B. 108. organization; 80.221 Publicly-supported bequest held as endowment. For the purpose of determining whether the “mechanical test” is satisfied, an outright bequest which is received by an organization during one of the four taxable years immediately preceding the current taxable year and which is held as an endowment by such an organization rather than being disbursed for current expenses, is includable in the computation of support specified in section 1.170-2(5)(iii)(b) of the regulations. §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 67-160, 1967-1 C.B. 65. 80.222 Publicly-supported organization; rulings. Organizations that have received ruling letters holding them to be publicly supported under section 170(b)(1)(A)(vi) will be treated as such organizations for 90 days after publication of the final regulations thereunder, even though the organizations do not qualify under such regulations, provided the facts on which the ruling is based have not been substantially changed and the ruling has not been expressly revoked. §§1.170-2, 301.7805-1. (Secs. 170, 7805; ’86 Code.) Rev. Rul. 71-298, 1971-2 C.B. 155. 80.223 Qualification of recipient; political activities. Taxpayer claimed a charitable deduction for contributions to a nonprofit corporation organized by him for charitable purposes. Shortly after its organization exemption was denied under section 101(6) of the ’39 Code due to a grant it made to another nonprofit corporation determined by the Commissioner to be engaged in political activities. A refund of the grant was requested and received after which qualification was granted under section 101(6) for future years. Held, the grant was made in good faith and the belief that the recipient was qualified under section 101(6); taxpayer is entitled to the deduction claimed. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Murray Seasongood, 22 T.C. 671, Acq., 1954-2 C.B. 5. 80.224 Qualified appraisal; closely held corporations and personal service corporations. The requirement for a qualified appraisal from a third party in the case of certain charitable contributions of property by closely held corporations and personal service corporations will be waived under final regulations to be issued under section 170(a)(1) of the Code. Notice 89-56, 1989-1 C.B. 698. 80.225 Realty; purchase price from donor. A railroad corporation’s contribution of cash equal to the fair market value of improved property to an organization described in section 170(c)(2), and the organization’s payment of this amount to the railroad to “purchase” the facility constitutes a charitable contribution of property in an amount determined under section 170(e). The annual payment made by the railroad to the organization for specified operating expenses in consideration for making the facilities available for the use of its employees is a deductible business expense. §§1.162-15, 1.170A-1, 1.1245-1, 1.1250-1. (Secs. 162, 170, 1245, 1250; ’86 Code.) Rev. Rul. 76-151, 1976-1 C.B. 59. 80.226 Realty; undivided present interest, The fair market value of an undivided two-fifths present interest in real property, donated by the owner to a section 170(c) organization is deductible as a charitable contribution. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 58-261, 1958-1 C.B. 143. 80.227 Realty; undivided present interest given state. A gift to a state of an undivided present interest in real property for use as a Governor’s Mansion is a contribution for an exclusively public purpose; the fair market value of the contributed interest at the time of the gift is deductible as a charitable contribution. (Sec. 170, ’86 Code.) Rev. Rul. 57-511, 1957-2 C.B. 158. 80.228 Recovery of donations; redonated to another charitable organization. Cash donations to a charitable organization over a period of years that are repaid to a taxpayer and redonated to another charitable organization in the same year are, to the extent a tax benefit was derived from deductions claimed in prior years, includible in gross income in the year of recovery under section 111. However, the repaid funds donated to the other organization are considered a charitable contribution. §§1.61–1, 1.111–1, 1.170A-1. (Secs. 61, 111, 170; ’86 Code.) Rev. Rul. 76-150, 1976-1 C.B. 38. 80.229 Red Cross activities. A member of the Board of Governors of the American Red Cross who traveled to Chicago to attend meetings and stayed at a private club could deduct a portion of the expenses at the club as charitable contributions. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Henry Cartan, 30 T.C. 308, Acq., 1958-2 C.B. 4. 80.230 Rehabilitation center. A contribution to a rehabilitation center to provide funds for a building for use in the treatment of handicapped individuals constitutes a contribution to a hospital. (Sec. 170, ’86 Code.) Rev. Rul. 55-268, 1955-1 C.B. 28. 80.231 Reimbursement to state for hospital care. Payments made to a state hospital for the purpose of reimbursing the state for the hospital care of a person do not constitute contributions or gifts made to or for the use of a state for exclusively public purposes. Accordingly, such payments are not deductible as charitable contributions. (Sec. 170, ’86 Code.) Rev. Rul. 57-211, 1957-1 C.B. 97. 80.232 Religious order; members’ outside eamings remitted to order. Amounts received by members of an exempt religious order, not acting as agents of the order, for work performed outside the religious community and paid over, in full or part, to the order at its direction, are includible in the gross incomes of the members and are wages subject to the FICA and income tax withholding. However, the individual members are entitled to charitable contribution deductions for amounts remitted to the order. Clarified by Rev. Rul. 77-290. §§1.61-2, 1.170A-1. (Secs. 61, 170, 3121, 3401; ’86 Code.) Rev. Rul. 76-323, 1976–2 C.B. 18. 80.233 Religious order; vow of poverty member’s trust income remitted to order. Trust income, the assignment of which is prohibited by the trust instrument and state law, is includable in the gross income of a trust income beneficiary who joined a religious order, took a vow of poverty, and, pursuant to the vow, turned over all payments from the trust to the order. The amount turned over to the order is deductible as a charitable contribution. §§1.61-1, 1.170A-1. (Secs. 61, 170; ’86 Code.) Rev. Rul. 77-436, 1977-2 C.B. 25. 80.234 Religious school. A religious school which has a regular faculty, curriculum, and enrollment of students in attendance at the place where its educational activities are conducted is an educational organization. Therefore, the additional ten percent deduction is applicable to contributions made to it by individual donors. §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 68–175, 1968–1 C.B. 83. 80.235 Remainder interest in property; life estate retained. A remainder interest in farm property donated to the United States for use as a national park by a donor corporation which reserved to itself an estate for the life of a husband and wife or either of them as survivor, is deductible as a charitable contribution in the year it is paid. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 73–297, 1973–2 C.B. 67. 80.236 Rent-free use of property. Prior to the amendment of section 170 of the Code by Pub.L. 91–172, a charitable deduction would be allowable for rent-free use of property granted an exempt organization if it resulted in a legally enforceable conveyance of a present interest under local law. I.T. 3018 superseded. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 70-477, 1970-2 C.B. 62. 80.237 Repayment of loans granted by exempt foundation. Amounts repaid by students on loans granted to them for the furtherance of their education by an exempt foundation are not deductible as charitable contributions. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 71-269, 1971-1 C.B. 93. 80.238 Reserve officers’ association. Contributions to a reserve officers’ association are not deductible as charitable contributions unless membership is limited to war veterans, or the association is essentially a war veterans’ organization. §§39.23(o)-1, 39.23(q)–1. (Secs. 23(o), 23(q), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 55–156, 1955-1 C.B. 292. 80.239 Restoration of state-owned mansion. Payments made by a taxpayer to finance the restoration and maintenance of a state-owned historic mansion and its surrounding grounds in accordance with specifications set by the state, in exchange for a nonassignable right to reside on the premises for a period of 15 years, are not deductible as charitable contributions unless the payments exceed the monetary value of all benefits received or expected to be received. The amount of any such excess would be deductible to the extent provided bv section 170. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 76-185, 1976-1 C.B. 60. 80.240 Restricted easement in real property. A gratuitous conveyance to the U.S. of a restric- Charitable contributions tive easement in real property to enable the Federal Government to perserve the scenic view afforded certain public properties is a charitable contribution, and the grantor is entitled to a deduction for the fair market value of the easement; however, the basis of the property must be adjusted by eliminating that part of the total basis which is properly allocable to the restrictive easement granted. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 64-205, 1966-2 C.B. 62. rate fund exclusively for religious, charitable, scientific, literary, or educational purposes, apart from other funds, so that contributions to the fund will be deductible. §§39.23(o)–1, 39.23(q)–1, 39.101(6)-1. (Secs. 23(o), 23(o), 101, ’39 Code; Secs. 170, 501, ’86 Code.) Rev. Rul. 54-243, 1954-1 C.B. 92. education of the public, with respect to the purposes and the activities of the United Nations, is not entitled to exemption under section 501(c)(3). However, contributions made to or for the use of the committee for exclusively public purposes are deductible. §§1.1701, 1.501(c)(3)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 62–66, 1962–1 C.B. 83. 80.256 State Bar. Unrestricted contributions made to or for the use of an integrated State Bar that is not a political subdivision of a state and has private as well as public purposes are not deductible under section 170. Rev. Rul. 59–152 revoked. Amplified by Rev. Rul. 78-129. §§1.1701, 301.7805-1. (Secs. 170, 2055, 2522, 7805; ’86 Code.) Rev. Rul. 77–232, 1977-2 C.B. 71. 80.257 State Bar. The satisfaction on or after July 5, 1977 of a legally enforceable obligation resulting from a pledge made prior to that date to an integrated State Bar may qualify as a deductible charitable contribution. Rev. Rul. 77–232 amplified. §§1.170-1, 301.7805-1. (Secs. 170, 2053, 2055, 2522, 7805; ’86 Code.) Rev. Rul. 78-129, 1978-1 C.B. 67. 80.258 State international steeplechase race; sponsorship advances. Sponsorship payments to the Department of Parks, Recreation, and Tourism of a State used to pay deficits incurred in running a State sponsored steeplechase race to promote tourism are deductible as a charitable contribution to the extent actually used for that purpose. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 72–194, 1972-1 C.B. 94. 80.259 State pension plan; third party donations. Contributions made by third parties to pension funds established under a state law for the benefit of municipal employees, municipal policemen, or municipal firemen are deductible by the donors. (Sec. 170, ’86 Code.) Rev. Rul. 58-154, 1958-1 C.B. 125. 80.260 State Presidential inaugural parade fund. Contributions to a fund established by a State to defray the expense of providing State units in a Presidential inauguration parade are deductible by the contributors. (Sec. 170, ’86 Code.) Rev. Rul. 58–265, 1958-1 C.B. 127. 80.261 State sales and use tax refund given State. State sales and use taxes previously deducted, which has been determined to be erroneously collected and subject to refund but which the taxpayer chooses to treat as a gift to the State, are includible in gross income in the year all events occured that fixed his right to a refund; however, a charitable deduction is allowable for the taxable year during which the State is affirmatively notified of the gift; where no such action has been taken and the statute of limitations within which to file a claim for refund with the State has expired, no deduction is allowable. Distinguished by Rev. Rul. 73–385. §§1.61–1, 1.170–1, 1.451–1. (Secs. 61, 170, 451; ’86 Code.) Rev. Rul. 70-419, 1970-2 C.B. 5. 80.262 Statue given through foreign country to U.S. city. The cost to the taxpayer of creating a statue which he donated to a foreign government that formally presented it to a city in the U.S. is not deductible by the taxpayer as a contribution or gift to the city receiving the statue. (Sec. 170, ’86 Code.) Rev. Rul. 58-405, 1958-2 C.B. 98. 80.263 Stock; reacquired from charitable donee. Where a donor transfers stock, without consideration, to a charitable organization under a “gentlemen’s agreement” which allows him to reacquire the stock one month later at its then fair market value, the amount of cash paid to the donee in reacquiring the stock, and not the fair market value of the stock when transferred, is deductible 80.249 Service Corps of Retired Executives; out-of-pocket expenses. Unreimbursed out-ofpocket transportation expenses and expenditures for meals and lodging while away from home, nec80.241 Road improvement project. The amount paid to a county on a promissory note essarily incurred by a volunteer member of the conditioned on, and payable upon, the county Service Corps of Retired Executives (SCORE) hard-surfacing the roads in the vicinity of the tax- while rendering gratuitous services as a business payer’s property is not deductible as a charitable consultant directly to small businessmen in furcontribution; however, the amount paid is a capital therance of the purpose of the Small Business expenditure. §§1.170A-1, 1.263(a)–1. (Secs. 170, Administration to provide management assistance to small firms, are deductible as charitable con263; ’86 Code.) tributions. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 76-257, 1976-2 C.B. 52. Rev. Rul. 67-362, 1967-2 C.B. 117. 80.242 Sales promotion. Amounts paid by the 80.250 Services for charitable organization; sole stockholder of a corporation to a charity in the redemption of tags attached to products sold by the travel expenses. A per diem travel expense allowcorporation are nondeductible charitable contribu- ance received by an individual performing gratuitous services for a charitable organization is tions. (Sec. 170, ’86 Code.) includable in gross income to the extent it exceeds Rev. Rul. 55–514, 1955-2 C.B. 55. actual travel expenses; expenditures in excess of 80.243 Salvation Army. The Salvation Army is the allowance received are deductible as charitaa church or convention of churches and contribu- ble contributions. §§1.61-1, 1.170-2. (Secs. 61, tions to it will be deductible by the donor. 170; ’86 Code.) §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 67–30, 1967–1 C.B. 9. Rev. Rul. 59-129, 1959-1 C.B. 58. 80.251 Services for exempt organization; 80.244 Section 306 stock; appreciated in traveling expenses. A taxpayer who gives his servalue. An example illustrates that the amount vices gratuitously to an association, contributions allowable as a deduction for a charitable contribu- to which are deductible under section 23(o) of tion of section 306 stock, made after 1969, is the the ’39 Code, and who incurs unreimbursed travelfair market value of the stock reduced by the ing expenses, including the cost of meals and lodgamount of gain that would not have been long- ing, while away from home in connection with the term capital gain if the stock had been sold at its affairs of the association and at its direction, may fair market value at the time of the contribution. deduct such amounts as a charitable contribution. §§1.170A-4, 1.306-1. (Secs. 170, 306; ’86 Code.) §§39.23(a)-1, 39.23(o)-1. (Secs. 23(a), 23(o), ’39 Rev. Rul. 76-396, 1976–2 C.B. 55. Code; Secs. 162, 170, ’86 Code.) Rev. Rul. 55-4, 1955-1 C.B. 291. 80.245 Section 306 stock; contributed to exempt organization. Where a shareholder, hold- 80.252 Services for exempt organization; ing common stock of a corporation, received a traveling expenses. Traveling expenses incurred stock dividend payable in newly issued preferred in connection with the performance of official stock, and, in turn, transferred the preferred stock duties by an uncompensated officer and member to a tax-exempt charitable foundation, such a of an organization exempt from tax under section transfer or subsequent sale of the stock by the 501(c)(4) are not deductible as charitable confoundation involved no realization of income to tributions. Modified to provide that such expenses the shareholder within the meaning of section incurred by an uncompensated officer and mem306(a). The contribution of the preferred stock to ber of an organization, which is of the type conthe foundation is deductible as a charitable con- templated by section 170(c)(3), are deductible as tribution. §1.3061. (Secs. 170, 306; ’86 Code.) charitable contributions and a war veterans’ orgaRev. Rul. 57-328, 1957-2 C.B. 229. nization, exempt under section 501(c)(4), may be of the type contemplated by section 170(c)(3). 80.246 Section 306 stock; contributed to §39.23(o)-1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 exempt organization. A corporation issued sec- Code.) tion 306 stock to its controlling shareholder in a Rev. Rul. 55–151, 1955–1 C.B. 28; Rev. Rul. reorganization to accomplish a valid business 57-327, 1957-2 C.B. 155. objective, although an issue of long term bonds would have accomplished the same objective. The 80.253 Social welfare organization; represenshareholder has not shown that none of the princi- tation on tax matters. A nonprofit organization pal purposes of the stock issue was the avoidance formed to promote the common good and welfare of federal income tax. The shareholder’s charita- of the general public by representing the interests ble contribution of the stock will be reduced under of the public at legislative and administrative hearsection 170(e)(1)(A). §§1.170A-4, 1.306–2. ings on tax matters qualifies for exemption as a social welfare organization. Contributions to the (Secs. 170, 306; ’86 Code.) Rev. Rul. 80-33, 1980-l C.B. 69. organization are not deductible. §§1.170-1, 1.501(c)(4)-1. (Secs. 170, 501; ’86 Code.) 80.247 Securities; right to require cash disRev. Rul. 71-530, 1971-2 C.B. 237. tribution retained. A grantor may claim a contribution, subject to the additional ten percent 80.254 Stadium for school district. Contribuimitation, for securities transferred to a section tions to an exempt organization organized to build 170(b)(1)(A) organization, even though he may a stadium and lease it to a school district are later require the organization to distribute cash deductible. (Sec. 170, ’86 Code.) Rev. Rul. 57-493, 1957-2 C.B. 314. equivalent to their fair market value to a similar organization. §1.170-2. (Sec. 170, ’86 Code.) 80.255 State activity; promotion of the Rev. Rul. 69–276, 1969–1 C.B. 64. United Nations. A committee created by execu80.248 Separate charitable fund. Exempt tive order of the governor of a state as an official organizations, other than those exempt under sec- agency to commemorate “United Nations Day” tion 101(6) of the ’39 Code, may establish a sepa- and to conduct a continuing program for the Charitable contributions as a charitable contribution. The basis of the stock purposes of the minimum tax. §§1.642(c)-3, in the hands of the donor remains the same as it 1.1202-1. (Secs. 57, 642, 1202; ’86 Code.) was before he transferred the stock. §§1.170–1, Rev. Rul. 74-317, 1974-2 C.B. 13. 1.1012-1. (Secs. 170, 1012; ’86 Code.) Rev. Rul. 67–178, 1967–1 C.B. 64. 80.272 Trust; capital gains. The deduction of 50 percent capital gains deduction allowed under 80.264 Stock; voting; donor retaining right to section 1202 is not a tax preference item for detervote. A contribution of voting stock to a charitable mining tax liability under section 56 for a trust that organization with the donor retaining the right to pays its capital gains to a charitable organization. vote that stock constitutes a contribution of a par- §§1.642(c)-1, 1.1202-1. (Secs. 57, 642, 1202; ’86 tial interest for which a charitable contribution Code.) deduction is not allowable. §1.170A-7. (Sec. 170, Rev. Rul. 73-43, 1973-1 C.B. 37. ’86 Code.) Rev. Rul 81-282, 1981-2 C.B. 78. 80.273 Trust; capital gains; charitable and noncharitable bequests. A trust that is terminat80.265 Sustainer’s gift; admission to retireing and sells certain assets at a gain to meet the ment home. A sustainer’s gift that is requested by requirements of its governing instrument that it a retirement home based on the type of accom- pay a bequest of a specified dollar amount from its modations desired and paid by the taxpayer before corpus in a single payment to a noncharitable trust, acceptance for residency is not deductible as a the remainder of its corpus being payable to a charcharitable contribution. §1.170-1. (Sec. 170, ’86 itable organization, is entitled to deduct under secCode.) tion 642(c)(1) the lesser of the amount of the chariRev. Rul. 72–506, 1972-2 C.B. 106. table distribution or the capital gain realized, subject to the requirements of section 642(c)(4). 80.266 Tax benefit rule; trust corpus The amount paid to the noncharitable trust is not returned to grantor. The William F. Perry deci- deductible by the terminating trust under section sion holding that the return to the grantor of the 661, nor includible in the noncharitable trust’s corpus of a charitable trust constitutes a nontax- gross income. §§1.642(c)-1, 1.661(a)-1, able return of capital even though the grantor had 1.662(a)-1, 1.663(a)-1. (Secs. 642, 661, 662, 663; realized full tax benefits from charitable deduc- ’86 Code.) tions allowed for transfers to the trust in prior tax Rev. Rul. 78-24, 1978-1 C.B. 196. years, will not be followed. (Sec. 61, ’86 Code.) Rev. Rul. 59-141, 1959-1 C.B. 17. 80.274 Trust; charitable deduction; grantor trust. An irrevocable trust whose governing 80.267 Theater ticket donated to sponsoring instrument provides for distribution of all ordinary organization for resale. The holder of a season to organizations described in ticket to a theatrical series who donates, for resale incomeby the close of the year followingsection 170(c) the by the sponsoring charitable organization, a ticket of receipt, addition of capital gains to corpus,year and to an individual theater performance for which a termination of the trust and distribution of corpus single admission charge equals or exceeds the average cost per performance of a season ticket is to the grantor no sooner than ten years and one after its creation entitled to a charitable contribution deduction of month section 642(c)(1)is allowed a deduction for amounts of gross an amount equal to his pro rata cost of the individ- under paid to the charitable organizations, income ual performance ticket. Rev. Rul. 67–246 distin- except to the extent the trust has unrelated busiguished. §1.170A-1. (Sec. 170, ’86 Code.) ness income. §§1.642(c)–1, 1.671–1, 1.677(a)–1. Rev. Rul. 74-348, 1974-2 C.B. 80. (Secs. 642, 671, 677; ’86 Code.) Rev. Rul. 79–223, 1979-2 C.B. 254. 80.268 Township authority; sewer and water system. The Township of Falls Authority, engaged in constructing, maintaining, and operat- 80.275 Trust; charitable deduction; no paying a sewer and water system for the benefit of the ment. A nonexempt charitable trust, whose agreeresidents of such township, is a political subdivi- ment required that income be used for charitable sion of Pennsylvania, and contributions made to it purposes, but was unable to pay out any income are deductible as made to or for the use of a politi- for charitable purposes that year due to obligations cal subdivision of a state. §1.170-1. (Sec. 170, ’86 in connection with a prior year’s transaction, properly deducted an amount equal to its net income as Code.) a charitable contribution. (Sec. 162(a), ’39 Code; Rev. Rul. 58-473, 1958–2 C.B. 100. Sec. 642, ’86 Code.) Leon A. Beeghly Fund, 35 T.C. 490, Nonacq., 80.269 Transfer to nonexempt fund. A con1962-1 C.B. 4. tribution to an exempt organization, earmarked for a particular purpose and subsequently transferred at the request of the donor to a nonexempt fund, 80.276 Trust; charitable gifts per settlement constitutes taxable income to the donor for the agreement. Payments to charity, made by the year of transfer, to the extent of the amount pre- executor of an estate out of estate income, attributviously taken as a deduction. §§39.23(o)–1, able to that part of the estate transferred to charity, 39.23(q)–1. (Secs. 23(o), 23(q), ’39 Code; Sec. under the terms of a settlement agreement resulting from the contest of a will, are deductible by the 170, ’86 Code.) estate as gifts of income to charity. Rev. Rul. Rev. Rul. 54-566, 1954-2 C.B. 96. 55-122 revoked. §1.642(c)-1. (Sec. 642, ’86 80.270 Transfer to trust. Where a taxpayer Code.) Rev. Rul. 59-15, 1959-1 C.B. 164. irrevocably transfers property to a trust to be held for a period of 10 years and 10 days for the benefit of a charitable foundation meeting the require- 80.277 Trust; created for construction of ments of section 23(o)(2) of ’39 the Code, the tax- building. Taxpayers made contributions to a trust payer is entitled to a deduction of the present value whose only activity was the receiving and holding of the property interest which she contributed to of funds to be used for the construction of a building to house domestic fraternal societies operating the trust. §29.23(o)–1. (Sec. 23(o), ’39 Code; Sec. under the lodge system and to be used exclusively 170, ’86 Code.) for religious, charitable, scientific, literary and Rev. Rul. 194, 1953–2 C.B. 128. educational purposes. After the building was com80.271 Trust; capital gains. The capital gain pleted the trust was recognized as a tax-exempt deduction allowed to a trust with respect to its net charitable organization. Held, taxpayers’ conlong-term capital gain permanently set aside for tributions were deductible as charitable contributhe use of a charitable organization in accordance tions. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) with section 642(c) is not a tax perferenceitem for Fred Draper, 32 T.C. 545, Acq., 1960-2 C.B. 4. 80.278 Trust; deduction. A trust does not qualify as a charitable remainder trust and no deduction is allowable under sections 170 and 2522 if it is possible that federal estate and state death taxes may be payable from the trust assets. However, a trust will qualify as a charitable remainder trust and a deduction is allowable under sections 170 and 2522 if a secondary life beneficiary furnishes the funds for the payment of any death taxes for which the trust may be liable. Rev. Rul. 72–395 modified. §§1.170A-1, 1.664–3, 301.7805–1. (Secs. 170, 664, 2036, 2522, 7805; ’86 Code.) Rev. Rul. 82-128, 1982–2 C.B. 71. 80.279 Trust; income set aside for charitable purposes. A trust which provides for the reversion of principal on termination to the creator does not qualify for exemption; however, where the net income of the trust is required, under the terms of the governing trust instrument, to be used exclusively for religious, charitable or educational purposes, the organization is allowed deductions by section 642(c) (subject to the limitations of that section) of an amount equal to its entire net income. §§1.501(c)(3)–1, 1.642(c)–1. (Secs. 501, 642; ’86 Code.) Rev. Rul. 66-259, 1966-2 C.B. 214. 80.280 Trust; income to discharge charitable pledge of grantor. The grantor will not be treated as the owner of a trust, under section 677, where trust income is applied to discharge a charitable pledge made by the grantor, if he would have been entitled to a deduction under section 170 if he had personally satisfied the pledge. The grantor will not be entitled to any charitable deduction on account of payments of trust income; however, such payments will be deductible by the trust. §§1.170-1, 1.677(a)-1. (Secs. 170, 677; ’86 Code.) Rev. Rul. 64-240, 1964–2 C.B. 172. 80.281 Trust; political subdivision of foreign government. A trust whose governing instrument requires it to pay its income annually to a political subdivision of a foreign government, with the principal to revert to the grantor at the end of twelve years, and suggests, but does not require, that the income be used for educational purposes may not deduct such unrestricted income payments to the political subdivision of the foreign government as charitable contributions under section 642(c). §1.642(c)–1. (Sec. 642, ’86 Code.) Rev. Rul. 78-436, 1978–2 C.B. 187. 80.282 Trust; reversionary; income for henetit of grantor. The grantor of a trust created for both private and charitable purposes has a reversionary interest under section 170 when there is a possibility that income or corpus in excess of five percent may be used for the benefit of the grantor in supporting his minor child, even though the grantor does not have a reversionary interest within the meaning of section 673. Therefore, no deduction is allowable to the grantor for charitable charges placed upon the trust, and income from the trust is not taxable to the grantor except to the extent actually used for the support and maintenance of the minor child. §§1.170-2, 1.673(a)–1, 1.677(b)-1. (Secs. 170, 673, 677; ’86 Code.) Rev. Rul. 61-223, 1961-2 C.B. 125. 80.283 Trust; reversionary; interest donated. Taxpayers who established similar income trusts in 1960 and 1971 for the benefit of relatives and a long-time employee of the family owned corporation whose stock formed the trust corpus, maintained their financial security and protected against a take-over by dissidents through a reversionary interest and restrictive language in the trust instrument, and donated their reversionary interest to a charitable organization after a 1975 merger of the family corporation into a widely traded, publicly owned corporation are not prevented by the provisions of section l70(f)(3)(A), added by the Tax Reform Act of 1969, from claim- Charitable contributions ing the donation as a charitable deduction. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 76-523, 1976-2 C.B. 54. 80.284 Trust; reversionary; interest released by grantor. The release by a grantor of a portion of his reversionary interest in a trust in favor of a qualified charitable organization gives rise to a deduction for a charitable contribution measured by the value of such portion of the reversionary interest at the time of its release. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 67-363, 1967-2 C.B. 118. 80.290 Trust remainder; collection of rare coins. The transfer of a coin collection to a trust with a retained life interest in exhibition fees and remainder to charities is a transfer of a future interest in tangible personal property for which a contribution deduction is not allowable in the year of transfer. §1.170–1. (Sec. 170, ’86 Code.) Rev. Rul. 69-63, 1969-1 C.B. 63. be redesignated from an organization qualifying for the 50 percent limitation to an organization subject to the 20 percent limitation. §§1.170A-6, 1.664-2, 1.664-3. (Secs. 170, 664; ’86 Code.) Rev. Rul. 79-368, 1979-2 C.B. 109. 80.297 Trust remainder; pooled income fund. An otherwise qualifying fund whose governing instrument permits the duration of a beneficiary’s income interest to be measured by the life of another does not qualify as a pooled income fund under section 642(c)(5), and the value of a remainder interest in property transferred to the fund is not deductible under section 170, 2055, 2106, or 2522, even though the instrument of transfer bases the duration of the designated beneficiary’s income interest on the beneficiary’s life. The fund’s governing instrument may be amended to qualify prospectively if the fund has not accepted property under a defective instrument of transfer. §§1.170A-6, 1.642(c)-5. (Secs. 170, 642, 2055, 2106, 2522; ’86 Code.) Rev. Rul. 79-61, 1979–1 C.B. 220. 80.298 Trust remainder; power of appointment retained. Retention of power to appoint specific beneficiaries of a charitable remainder interest, including organizations other than those described in section 170(b)(1)(A), does not defeat the charitable contribution deduction, subject to the 20 percent limitation of section 170(b)(1)(B). §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 68–417, 1968–2 C.B. 103. 80.299 Trust remainder; power of appointment retained. Taxpayer created irrevocable trusts with named individuals as life income beneficiaries and the remainders to such charities as appointed in her will. Her power of appointment was limited to charities meeting the limitations of section 170(b)(1)(A). Held, the present value of the remainder interests are deductible gifts to, not merely for the use of, such charities. (Sec. 170, ’86 Code.) Alice Tully, 48 T.C. 235, Acq., 1970–2 C.B. xxi. 80.300 Trust remainder; sample forms; unitrust. This revenue procedure makes available a sample form of declaration of trust that meets the requirements for an inter vivos charitable remainder unitrust providing for unitrust payments for one life, as described in section 664(d)(2) of the Code. §§1.170A-6, 1.664-3. (Sec. 601.201, S.P.R.; Secs. 170, 664, 2522, ’86 code.) Rev. Proc. 89-20, 1989-1 C.B. 841. 80.301 Trust remainder; undivided interest. The present value of an undivided portion of a taxpayer’s entire remainder interest in property of a trust that is contributed to a charitable organization is deductible in the manner and to the extent provided in section 170. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 72-419, 1972-2 C.B. 104. 80.291 Trust remainder; conditional gift. Elderly taxpayers created a trust naming themselves trustees and life income beneficiaries with remainder to their designated charities. The trust instrument provided for the return of their contribution if a charitable deduction were disal80.285 Trust; reversionary; transfer of lowed. Held, neither the trust proviso nor the taxdivested stock. The transfer of certain stock to a payer’s broad management powers prevented the reversionary trust, part of the income from which charitable deduction. The contribution could not is “divested stock” within the meaning of section be recaptured if the instant litigation were success1111(e), where such divested stock is payable irre- ful and, under the circumstances, it was highly vocably for a period of over two years to certain improbable that the charities would not receive the designated charities is not, under the circum- remainder interest. (Sec. 170, ’86 Code.) stances, taxable to the taxpayer-grantor; however, William D. O’Brien, 46 T.C. 583, Acq., 1968-1 because of his reversionary interest in the divested C.B. 2. stock he is not allowed a charitable deduction. §§1.170-2, 1.673(b)-1. (Secs. 170, 673; ’86 80.292 Trust remainder; conditional gift. Code.) Where a trust agreement makes a present gift to Rev. Rul. 67-42, 1967-1 C.B. 164. charity of a future interest in property and contains a provision calling for the revocation of any of the 80.286 Trust income; trust not terminated. broad discretionary powers given to the trustees if, Although the trustees have the power to terminate by reason thereof, Federal tax liability is incurred, the trust at any time and pay over the entire corpus such provision is a condition subsequent which is or income to certain charities, a donation to a char- contrary to public policy and therefore void. ity made out of income prior to a decision to termi- Accordingly no deduction will be allowed for the nate the trust is not deductible by the trust estate. present worth of the charitable remainder interest. §39.162-1. (Sec. 162, ’39 Code; Sec. 641, ’86 Distinguished by Rev. Ruls. 75-440 and 76-199. §1.170-2. (Secs. 170, 2522; ’86 Code.) Code.) Rev. Rul. 55-92, 1955-1 C.B. 390. Rev. Rul. 65-144, 1965-1 C.B. 442. 80.287 Trust remainder. When a taxpayer creates a trust, naming a designated beneficiary as the life tenant with the remainder interest to a charitable organization, amounts contributed to the trust are not considered to be made to the charity. The present value of the remainder interest constitutes an amount contributed for the use of the charity and is deductible in the taxable year the property is transferred to the trust. §39.23(o)–1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 57-562, 1957-2 C.B. 159. 80.288 Trust remainder; capital gain distributions from mutual funds. Where local law authorizes a trustee to invest corpus in the stock of regulated investment companies and to pay out capital gains distributions received therefrom as income under the general provisions of the governing instrument, a charitable deduction is not allowable with respect to a charitable remainder interest as the charitable interest is not severable from the noncharitable interest. This ruling will not be applied with respect to transfers completed prior to May 1, 1967, or, under certain circumstances, to transfers made under instruments executed prior to that date. Rev. Rul. 60-385 supplemented. §§1.170-1, 301.7805-1. (Secs. 170, 7805; ’86 Code.) Rev. Rul. 67-33, 1967-1 C.B. 62. 80.293 Trust remainder; conditional gift. The contingent provision in a trust instrument, providing that all the trust assets revert to the grantors in the event the Service disallows a charitable deduction for the value of the remainder interest, precludes the trust from meeting the definition of a charitable remainder annuity trust and the value of the remainder interest contributed to the trust is not deductible as a charitable contribution. Rev. Rul. 60-276 distinguished. §§1.170A-1, 1.664-1. (Secs. 170, 664; ’86 Code.) Rev. Rul. 76-309, 1976-2 C.B. 196. 80.294 Trust remainder; “divested stock.” Tax consequences of a trust arrangement where an individual taxpayer transfers in trust, prior to a divestiture distribution, stock in a company which is subject to an “antitrust order” within the meaning of section 1111(d) and the divested stock is paid over by the trustee to become the corpus of a second trust, created under the same instrument, income of which is payable to the grantor and others with remainder to charitable organizations. §§1.170-2, 1.677(a)-1. (Secs. 170, 677; ’86 Code.) Rev. Rul. 68-440, 1968-2 C.B. 289. 80.302 Trust remainder; unitrust. The remote possibility that a foundation, an organization qual80.295 Trust remainder; gain realized on ifying under section 170(c) and the trustee-chariprincipal. Gain realized from the sale or exchange table remainderman under a charitable remainder of trust assets which under state law become a part unitrust, would not qualify under section 170(c) of trust principal and which will, upon termination upon termination of the trust will not preclude a 80.289 Trust remainder; capital gain divi- of the trust, go to an organization described in sec- charitable contribution deduction of the value of dends as corpus. Where an irrevocable trust pro- tion 170(c) may be regarded as permanently set the remainder interest where the trust instrument vides that capital gain dividends received from aside for a charitable purpose where it can be reli- provided in such event that distribution be made to stock in regulated investment companies shall be ably predicted, after considering all the facts, that other qualifying charities selected by the trustees. treated as corpus and held for the charitable the principal of the trust will not be invaded for the §§1.170A-6, 1.664-1. (Secs. 170, 664, 2055, remainderman rather than distributed to the non- benefit of the income beneficiary. §1.642(c)-1. 2106, 2522; ’86 Code.) charitable life tenant, such dividends are deduct- (Sec. 642, ’86 Code.) Rev. Rul. 76–307, 1976–2 C.B. 56. ible and may be valued by the use of the appropriRev. Rul. 66-367, 1966-2 C.B. 241. 80.303 United charities plan. An employee of ate actuarial remainder table. However, where such capital gain dividends are treated as income 80.296 Trust remainder; percentage limita- a corporation having a so-called united charities and paid to the life tenant, no deduction for chari- tion of deduction. The allowable charitable plan may attach to his return a statement furnished table contributions is allowable. Rev. Rul. 55–620 deduction for property transferred to a valid chari- by the administrators of the plan showing the total revoked. Supplemented by Rev. Rul. 67–33. table remainder trust is subject to the 20 percent amount of his contributions and the percentage of contributions limitation when the organization such total amount which was distributed to each §1.170-1. (Sec. 170, ’86 Code.) designated to receive the remainder interest may designated charitable organization and then on his Rev. Rul. 60-385, 1960-2 C.B. 77. Charitable contributions return the name of the plan and the total amount contributed during the year. §39.23(o)-1. (Sec. 23(o), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 54-549, 1954-2 C.B. 94. 80.304 Universities; alumni associations. Social and recreational activities carried on by an alumni association of a university, which are merely incidental to its basic purpose and objective of advancing the interests of the university, do not of themselves preclude such organization from tax exemption as a charitable and educational association. Contributions, exclusive of membership dues, to such association are deductible, deductible personal expenses. However, this does not preclude the deduction of unreimbursed expenses which are directly connected with the rendition of gratuitous services performed for the church during the meeting. §§1.170-2, 1.262–1. (Secs. 170, 262; ’86 Code.) Rev. Rul. 61-46, 1961-1 C.B. 51. 77–280, 79-142, and 80-45 modified. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 84-61, 1984–1 C.B. 39; John D. Rockefeller, 3rd, 76 T.C. 178, Nonacq. withdrawn and Acq. substituted, 1984–1 C.B. 1. 80.319 Unreimbursed expenses; Red Cross and church workers. A charitable deduction is 80.312 Unreimbursed expenses; church dea- allowable for unreimbursed out-of-pocket con candidate. A taxpayer’s unreimbursed out- expenses incurred for transportation to and from a of-pocket expenses for vestments, books, and local hospital or church for the purpose of rendertransportation while participating, either as a dea- ing volunteer services to the American Red Cross con candidate or as an ordained deacon, in a per- and to the church and for the cost and maintenance manent diaconate program established by the tax- of uniforms which are required to be worn, if such payer’s church are deductible as charitable uniforms are without general utility. However, the G.C.M. 22116 revoked. §§1.170-1, cost of meals, unless necessarily incurred while 1.501(c)(3)-1. (Secs. 170, 501; ’86 Code.) contributions. §1.170A-1. (Sec. 170, ’86 Code.) away from home overnight in the course of renderRev. Rul. 76-89, 1976-1 C.B. 58. Rev. Rul. 60-143, 1960-1 C.B. 192. ing the volunteer services, is a nondeductible per80.305 Universities; endowment associa- 80.313 Unreimbursed expenses; church sonal expense. (Secs. 162, 170, 262; ’86 Code.) Rev. Rul. 56-508, 1956-2 C.B. 126. tions. Contributions to a university endowment evangelistic services. A taxpayer incurred out-ofassociation which acted as trustee of gifts made to pocket expenses in spreading the religious beliefs a university were not entitled to the maximum of his church through evangelistic work which the 80.320 Unreimbursed expenses; “study mischaritable contribution deduction. Rev. Rul. local church approved, encouraged, and aided, but sion” abroad. Unreimbursed expenses incurred by a taxpayer participating in a “study mission” 60-111 distinguished. §1.170-2. (Sec. 170, ’86 did not order, control, supervise, or pay for. Held, taxpayer’s expenses were deductible contribu- to Europe and Asia, authorized by a charitable Code.) tions “to or for the use of” the church. (Sec. 170, organization exempt from taxation under section Rev. Rul. 60-110, 1960-1 C.B. 121. 501(c)(3), are not deductible as charitable con’86 Code.) 80.306 Universities; fraternity houses. ConTravis Smith, 60 T.C. 988, Acq., 1974-2 C.B. 4. tributions Rev. Rul. 58–240 clarified. §1.170-2. (Sec. 170, ’86 Code.) tributions made to a college for the purpose of Rev. Rul. 71-135, 1971-1 C.B. 94. acquiring or constructing a housing facility for use 80.314 Unreimbursed expenses; city council by a designated fraternity, under certain terms and member staff expenses paid from personal 80.321 Unreimbursed expenses; VITA volunconditions, constitute allowable charitable deduc- funds. A member of a city council may deduct teers. Unreimbursed expenses for transportation, expenditures for salaries, office rent, and office paper and pencils, newspaper advertising, and tions. §1.170-1. (Sec. 170, ’86 Code.) supplies under section 162 provided the member similar items incurred by volunteers in connection Rev. Rul. 60-367, 1960-2 C.B. 73. itemizes deductions; however, the expenditures with their participation in the Volunteer Income 80.307 Unlimited; interpretation of “income are not deductible as charitable contributions Tax Assistance (VITA) program are deductible tax paid”. The income tax referred to in section under section 170, and the limitations of section under Section 170. §1.170A-1. (Sec. 170, ’86 170(b)(1)(C), relating to the unlimited deduction 162(b) do not apply. Rev. Rul. 59–160 revoked for charitable contributions, contemplates only and Rev. Ruls. 73–464 and 73–113 amplified. Code.) Rul. 80-45, 1980-1 C.B. 54. Rev. Federal income tax. §39.120–1. (Sec. 120, ’39 §§1.162-1, 1.170A-1. (Secs. 162, 170; ’86 Code.) Code; Sec. 170, ’86 Code.) 80.322 Valuation; auction sale. Taxpayers ReV. Rul. 84-110, 1984-2 C.B. 35. Rev. Rul. 55–308, 1955–1 C.B. 30. donated high quality household furnishings and expenses; Civil furs to a charity that sold the items shortly there 80.315 Unreimbursed 80.308 Unlimited deduction; qualification. In Defense volunteers. Actual unreimbursed after at unrestricted auctions for prices below their a taxable year for which the taxpayer seeks to qual- expenses incurred by civil defense volunteers in professionally appraised value.Held, the amounts ify for the unlimited charitable contribution the performance of their volunteer duties, such as received at auction were not conclusive of fair deduction, the full amount of the taxpayer’s chari- traveling expenses to watch atomic bomb tests, the market value for purposes of determining the table contributions must be taken into account in expenses of attending state meetings of civil allowable deduction; evidence of items’ condition computing his income tax liability. If this results defense volunteers, or other expenses directly and character, intrinsic and appraised value, and in nonqualification, the year may nevertheless connected with and solely attributable to the rendi- original and replacement cost indicated that qualify as a preceding year where the unlimited tion of such volunteer services, are deductible as higher prices could have been obtained under deduction is sought in a subsequent year. charitable contributions. (Sec. 170, ’86 Code.) other circumstances. (Sec. 170, ’86 Code.) §1.170-2. (Sec. 170, ’86 Code.) Rev. Rul. 56-509, 1956-2 C.B. 129. Daniel S. McGuire, 44 T.C. 801, Acq. in Result, Rev. Rul. 67-460, 1967–2 C.B. 123. 1966-1 C.B. 2. 80.316 Unreimbursed expenses; National 80.309 Unlimited overpayment credited Conference on Law and Poverty convention. 80.323 Valuation; fair market value; donated against estimated tax. An overpayment of tax Out-of-pocket expenses incurred for transporta- property. The fair market value of agricultural or which is claimed and allowed as a credit against tion, meals and lodging while away from home by manufactured products or property held for sale in the estimated tax for the succeeding year consti- persons officially invited and who attended the the ordinary course of business contributed to a tutes income tax paid in the succeeding year, for National Conference on Law and Poverty are charitable organization is not includable in the the purpose of applying the unlimited charitable deductible as charitable contributions. §1.170-2. donor’s gross income and is allowable as a charitable contribution as of the date of the gift and for contributions deduction, to the extent that esti- (Sec. 170, ’86 Code.) this purpose, the fair market value will be the Rev. Rul. 65-285, 1965-2 C.B. 56. mated tax payments during the succeeding year do replacement cost in the donor’s most favorable not exceed the tax liability. §39.120–1. (Sec. 120, 80.317 Unreimbursed expenses; organiza- market. However, to avoid a double deduction, the ’39 Code; Sec. 170, ’86 Code.) tion’s program for unmarried pregnant opening inventory for the year of the gift must be Rev. Rul. 55-255, 1955-1 C.B. 374. women. A charitable deduction is allowable for reduced to reflect the removal of the donated prop80.310 Unreimbursed expenses; church con- unreimbursed out-of-pocket expenses incumed by erty, and no deduction will be allowed in the year vention. Unreimbursed expenses incurred by a lay taxpayers participating in a program conducted by of contribution for cost of producing the donated member of a church who is appointed as delegate a charitable organization to assist unmarried preg- property. Considered modified to remove the to a church convention, or unreimbursed expenses nant women by taking an unmarried pregnant replacement cost concept of the fair market value incurred by a delegate to an American Legion woman into their home for a two-month period of property contributed to a charitable organizaConvention, and expenses directly connected with and providing her with food and clothing and a tion. I.T. 3910 revoked. §§39.22(a)-5, 39.22(a)–7, and solely attributable to the rendition of services small weekly allowance. §1.170-2. (Sec. 170, ’86 39.23(a)–1, 39.23(o)–1, 39.23(a)-1, 1.170-1. by them to the church or to the Legion are deduct- Code.) (Secs. 22(a), 23(a), 23(o), 23(q), ’39 Code; Secs. Rev. Rul. 69-473, 1969-2 C.B. 37. ible as charitable contributions. I.T. 1988 revoked. 61, 162, 170, ’86 Code.) Clarified by Rev. Rul. 71–135. §1.170-1. (Sec. Rev. Rul. 55–138, 1955–1 C.B. 223; Rev. Rul. 80.318 Unreimbursed expenses; qualifica- 68-69, 1968-1 C.B. 80. 170, ’86 Code.) tion as contributions “to” a charity.The Service Rev. Rul. 58–240, 1958–1 C.B. 141. 80.324 Valuation; fair market value; donated will follow the decision of the U.S. Court of 80.311 Unreimbursed expenses; church con- Appeals for the Second Circuit in Rockefeller v. property. A taxpayer who had voting control of a vention. Expenses of persons attending church Commissionrer that unreimbursed expenses corporation and an exempt private foundation conventions, assemblies, or other meetings, who incurred in rendering services to charitable orga- donated shares of the corporation’s stock to the are not attending as a duly chosen representative nizations were contributions made “to” the chari- foundation and, pursuant to a prearranged plan, of a congregation or other official church body, do table organizations. Rev. Ruls. 56-508, 57-38, caused the corporation to redeem the shares from not constitute charitable contributions but are non- 58-279, 67-362, 67-364, 69-473, 70-519, the foundation. The most recent transaction involving the stock was a redemption of stock held by the estate of a past shareholder that was subject to a prior cross-option agreement between the corporation and the estate. Held, the transfer to the foundation was a valid gift of stock, not the proceeds of the redemption, and the taxpayer realized no income from the redemption. The prior redemption was not a comparable sale from which the fair market value of the stock can be determined. (Secs. 170, 302, 331; ’86 Code.) Daniel D. Palmer, 62 T.C. 684; Acq. issue 1, Nonacq. issue 2; 1978-1 C.B. 2. 80.325 Valuation; guidelines. Guidelines are provided for persons making appraisals of donated property for Federal income tax purposes. §1.170-1. (Sec. 170, ’86 Code.) Rev. Proc. 66-49, 1966-2 C.B. 1257. 80.333 War veterans’ organizations Contributions to an organization, 90 percent of the membership of which is comprised of war veterans of the Armed Forces of the U.S., are deductible under section 170(c)(3). The fact that a small percentage of members have not served in a branch of the Armed Forces during war time will not preclude the organization from being classified as a war veterans organization. Rev. Rul. 59–151 modified and superseded. §1.170A-1. (Secs. 170, 2522; ’86 Code.) Rev. Rul. 84-140, 1984-2 C.B. 56. 80.334 Year of deduction. A charitable contribution in the form of a check is deductible in the taxable year in which the check is delivered provided the check is honored and paid and there are no restrictions as to time and manner of payment thereof. §§39.23(o)–1, 39.23(q)-1. (Secs. 23(o), 23(q), ’39 Code; Sec. 170, ’86 Code.) Rev. Rul. 54-465, 1954-2 C.B. 93. 80.326 Valuation; property normally held for sale. The fair market value of property normally sold by a taxpayer that is contributed to a charitable organization is its lowest usual selling price not 80.335 Year of deduction; charges to bank reduced by a discount for prompt payment offered credit card. A contribution made to a qualified charity by a charge to a bank credit card is deductto customers. §1.170-1. (Sec. 170, ’86 Code.) ible as a charitable contribution under section Rev. Rul. 69–514, 1969–2 C.B. 36. 170(a) in the year the charge is made regardless of 80.327 Valuation; restricted securities. when the bank is repaid. Rev. Rul. 68–174 distinGuidelines are set forth for the valuation, for Fed guished and Rev. Rul. 71–216 revoked. eral tax purposes, of securities that cannot be §§1.170A-1, 301.7805-1. (Secs. 170, 7805; ’86 immediately resold because they are restricted Code.) Rev. Rul. 78-38, 1978-1 C.B. 67. from resale pursuant to Federal Securities laws. Rev. Rul. 59–60 amplified. §1.170A-1. (Secs. 170, 2031, 2032, 2512; ’86 Code.) Rev. Rul. 77-287, 1977-2 C.B. 319. 80.328 Valuation; restrictions on use. When a donor places a restriction on the use of property, the amount of the charitable contribution deduction is the fair market value of the property at the time of the contribution determined in light of the restriction. §1.170A-1. (Sec. 170, ’86 Code.) Rev. Rul. 85-99, 1985-2 C.B. 83. 80.329 Valuation; “stapled,” “paired,” or “back-to-back” stock. Factors are set forth that should be considered, in addition to those in Rev. Rul. 59-60, in valuing the stock of a subsidiary corporation that is distributed to the shareholders of the former parent and that can be sold only with the stock of the distributing corporation. Rev. Rul. 59-60 amplified. §1.301-1. (Sec. 301, ’86 Code.) Rev. Rul. 80-213, 1980–2 C.B. 101. 80.330 Valuation; unimproved real property; market data approach. Guidance is provided to utilize the market data approach in appraising unimproved real property. §1.170A-1. (Sec. 601.105 S.P.R.; Secs. 170, 2031, 2512, ’86 Code.) Rev. Proc. 79-24, 1979-1 C.B. 565. 80.331 Volunteer fire company. Contributions or gifts to nonprofit volunteer fire companies are for the use of a political subdivision of a State for exclusively public purposes and are deductible as charitable contributions. I.T. 4030 superseded. Clarified by Rev. Rul. 74-361. §1.170-1. (Sec. 170, ’86 Code.) Rev. Rul. 71-47, 1971-1 C.B. 92. 80.332 Volunteer fire company. A nonprofit organization, organized and operated as a volunteer fire company to provide fire protection and ambulance and rescue services to a community, qualifies for exemption as a charitable organization, contributions to which are deductible. It may also qualify for exemption as a social welfare organization conducting weekly public dances which do not constitute an unrelated trade or business. Rev. Ruls. 66–221 superseded and 71–47 1.501(c)(3)-1, clarified. §§1.170A-1, 1.501(c)(4)–1, 1.513-1. (Sec. 23(o), ’39 Code; Sees. 170, 501, 513, ’86 Code.) Rev. Rul. 74–361, 1974-2 C.B. 159; Roy C. McKenna, 5 T.C. 712, Acq., 1974-2 C.B. 3.