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FUNDAMENTAL CONCEPTSStill another of these bodies of law relates to the general rule that U.S.donors cannot make deductible contributions to charitable organizations incountries outside the United States (with a few exceptions created by tax treaties177 ). As a consequence of this rule, foreign charities often establish subsidiarycharitable organizations in the United States. The federal tax law thus is appliedto evaluate whether the domestic charity is merely a conduit of funds to the foreigncharity. The U.S. donor becomes entitled to a charitable contribution deductiononly when the U.S. charity has complete discretion and control over the gift.When this is the case, the domestic donor is considered to have made a valid giftto the domestic charitable organization.Consequently, it is clear that the retention of mere recommendatory rightsdoes not prevent a transfer from being considered a gift. This conclusion is basedon the private foundation status termination rules, the community trust rules,the grantor trust rules, and the conduit charity rules.(g) Anticipatory Income AssignmentsA transaction may appear to be a charitable gift of property but, in actuality, bean anticipatory assignment of the income from the property that would otherwisehave flowed directly to the transferor. If that is the case, the charitable contributiondeduction is determined as if the gift were of money first received bythe donor from the property, 178 subject to the 50 percent limitation, 179 rather thana gift of the property, such as long-term capital gain property subject to the 30percent limitation. 180 Also, if the property has appreciated in value, the donormay be taxable on the resulting gain. 181An anticipatory assignment of income occurs in the charitable giving settingwhen a person has certain rights in the contributed property that have somatured or ripened that the person has a right to the proceeds from the propertyat the time the transfer is made. 182 If the transaction is an assignment of income,there may not be a charitable contribution deduction for the fair market value ofthe property transferred; the transferor may be taxable on the proceeds divertedto the charitable organization, and the charitable deduction may be determinedas if the gift were of the after-tax income.The distinction between a gift and an assignment of income is rarely easy tomake. All that is clear in this area is that the assignment-of-income doctrinemust be applied on a case-by-case basis. 183 As one court stated: “Whether a taxpayerpossesses a right to receive income or gain is, of course, a question of fact,each case turning on its own particular facts. The realities and substance of the177 See Chapter 18.178 See, e.g., Helvering v. Horst, 311 U.S. 112 (1940).179 See § 7.5.180 See § 7.8.181 The anticipatory assignment-of-income doctrine can be similar to the step transaction doctrine. The latter doctrineis the subject of § 4.8.182 See, e.g., Morgan Guaranty Trust Co. v. United States, 585 F.2d 988, 994 (Ct. Cl. 1978); S.C. Johnson & Son,Inc. v. Commissioner, 63 T.C. 778, 786 (1975).183 Harrison v. Schaffner, 312 U.S. 579 (1941). 82