Contents

§ 21.1 SUBSTANTIATION AND OTHER RECEIPT REQUIREMENTSAdditional rules apply with respect to gifts of property (other than money) forwhich the donor claims a federal income tax charitable contribution deductionin excess of $500. 22 (Again, these rules do not apply in cases where the appraisalrules apply.) In this situation, the donor is required to maintain additionalrecords, regarding• The manner of acquisition of the property, as, for example, by purchase,gift, bequest, inheritance, or exchange, and the approximate date of acquisitionof the property by the donor; or, if the property was created, produced,or manufactured by or for the donor, the approximate date theproperty was substantially completed 23• The cost or other basis of the property, other than publicly traded securities,held by the donor for a period less than the long-term capital gainsholding period immediately preceding the date on which the contributionwas made and, when the information is available, of property, other thanpublicly traded securities, held for the long-term capital gains holdingperiod preceding the date on which the contribution was made 24This information generally is to be provided as part of the donor’s income taxreturn. 25 If the donor, however, has reasonable cause for not being able to providethe information, the donor must attach an explanatory statement to thereturn. 26 If the donor can demonstrate this reasonable cause, the donor will notbe disallowed a charitable contribution deduction for failure to comply with therules pertaining to gifts of property having a value in excess of $500. 2722 Reg. § 1.170A-13(b)(3).23 Reg. § 1.170A-13(b)(3)(i)(A).24 Reg. § 1.170A-13(b)(3)(i)(B).25 Reg. § 1.170A-13(b)(3)(ii).26 Id.27 Id. In one instance, a court found a donor to be “candid, forthright and credible,” so it allowed some portionof a claimed charitable contribution deduction ($520 out of a claimed $1,320) even though none of the requiredsubstantiation was present. Hooks v. Commissioner, 66 T.C.M. (CCH) 797 (1993). In another instance, in theabsence of adequate substantiation of gifts to a church, the court allowed a portion of the claimed charitablededuction ($450 out of $3,470). Witherspoon v. Commissioner, 68 T.C.M. (CCH) 1333 (1994). See also Gettingsv. Commissioner, 55 T.C.M. (CCH) 1361 (1988); Wren v. Commissioner, 48 T.C.M. (CCH) 961 (1984);Fling v. Commissioner, 41 T.C.M. (CCH) 711 (1981); Thoda Estate v. Commissioner, 38 T.C.M. (CCH) 880(1979); Rennie v. Commissioner, 38 T.C.M. (CCH) 3 (1979); McKinley v. Commissioner, 37 T.C.M. (CCH)1769 (1978); Vieselmayer v. Commissioner, 37 T.C.M. (CCH) 1317 (1978); Wunderlich v. Commissioner, 37T.C.M. (CCH) 601 (1978); Bloom v. Commissioner, 37 T.C.M. (CCH) 582 (1978); Shepard v. Commissioner,35 T.C.M. (CCH) 219 (1976); Von Tersch, Jr. v. Commissioner, 31 T.C.M. (CCH) 938 (1972); White v. Commissioner,31 T.C.M. (CCH) 357 (1972); Donelan v. Commissioner, 30 T.C.M. (CCH) 278 (1971); Linghamv. Commissioner, 26 T.C.M. (CCH) 1158 (1967); Blunt v. Commissioner, 25 T.C.M. (CCH) 1445 (1996);Lingham-Pritchard v. Commissioner, 23 T.C.M. (CCH) 1100 (1964); Leitner v. Commissioner, 21 T.C.M.(CCH) 368 (1962); Herter v. Commissioner, 20 T.C.M. (CCH) 78 (1961); Hughes v. Commissioner, 17 T.C.M.(CCH) 696 (1958)). Decisions of this nature are based on estimates that the court determines are warranted bythe record according to the Cohan rule set forth in Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930).These regulations notwithstanding, one court observed that, to be fully deductible, charitable contributionsmust be substantiated in some manner. Henson v. Commissioner, 38 T.C.M. (CCH) 510 (1979). The cases inwhich a court found adequate substantiation in support of a charitable contribution deduction are rare; see, e.g.,Baxter v. Commissioner, 50 T.C.M. (CCH) 545 (1985); Wilhelm v. Commissioner, 46 T.C.M. (CCH) 176(1983); Summers v. Commissioner, 30 T.C.M. (CCH) 58 (1971); Forster v. Commissioner, 20 T.C.M. (CCH)1488 (1961). In a few instances, a charitable contribution deduction was upheld in the absence of substantiation,based on the donor’s testimony. See, e.g., Silverton v. Commissioner, 37 T.C.M. (CCH) 142 (1978); Novaky v.Commissioner, 36 T.C.M. (CCH) 1601 (1977); DeVine v. Commissioner, 35 T.C.M. (CCH) 23 (1976). 585