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PERCENTAGE LIMITATIONSThe deductibility, pursuant to federal income tax law, of a contribution to a charitableorganization can depend on several factors. 1 Two of these factors are:1. The nature of the item (money 2 or property) that is the subject of the gift2. The federal tax law classification of the charitable organization that is therecipient of the giftThese two elements are manifested in various limitations, expressed as percentages,imposed on both individual and corporate donors. 3§ 7.1 INTRODUCTIONOne of the elements in determining the extent of deductibility of a charitable giftis the nature of the item contributed.(a) Nature of GiftThis subject is treated more fully elsewhere, 4 but for these purposes, it is sufficientto note that the federal income tax law basically distinguishes betweengifts of money and gifts of property. As to the latter, the law differentiatesbetween the following categories of property:• Long-term capital gain property• Ordinary income property• Short-term capital gain propertyThese terms describe categories of property on the basis of the tax categorizationof the revenue that would result upon a sale of the property. For example, longtermcapital gain property is property that, if sold, would generate long-term capitalgain. Because these terms use the word gain, it is usually understood thatthese properties have appreciated in value (appreciated property) and thus wouldproduce a gain upon sale. Long-term capital gain property is often referred to ascapital gain property, and this text uses that wording throughout. 5For these purposes, contributions of ordinary income property and short-termcapital gain property are generally treated, for charitable deduction purposes, thesame as gifts of money. Thus, the tax rules that reference the deductibility of giftsof money are generally also applicable to gifts of property that, if sold, would giverise to ordinary income or to short-term capital gain.(b) Tax Law Classification of DoneeThe other of these two elements is the federal tax law classification of the charitabledonee. (This factor is applicable only in the case of giving by individuals.)1 See § 3.6.2 The term money (synonymous with cash) is used throughout to refer to United States currency. If the gift is ofcurrency of another country, it may be treated as property.3 These limitations may operate to prevent a donor from deducting, in any one year, the entirety of the value ofa charitable gift.4 See Chapters 2, 4.5 The federal income tax regulations use the term 30-percent capital gain property. Reg. § 1.170A-8(d)(3). 188