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§ 7.4 PERCENTAGE LIMITATIONS: AN OVERVIEW§ 7.3 CORPORATION’S TAXABLE INCOMEThe concept of a contribution base is not applicable to contributions by corporations.Rather, the percentage limitation is applicable to a corporation’s taxableincome. Taxable income is gross income less expenses, determined without regardto the charitable contribution deduction rules, rules providing special deductionsfor corporations, 16 any net operating loss carryback to the tax year, 17 andany capital loss carryback to the tax year. 18§ 7.4 PERCENTAGE LIMITATIONS: AN OVERVIEWBecause of the intricacies of these percentage limitation rules, an overview ofthem is appropriate. Each of these rules is discussed fully in subsequent sectionsof this chapter.The percentage limitations are applied in connection with the contributionyear or years involved. In the context of the tax rules concerning charitable giving,a tax year in which a gift is made is termed a contribution year. 19(a) General RulesAn individual’s federal income tax charitable contribution deduction for a taxyear is subject to limitations of 50, 30, and/or 20 percent of the individual’s contributionbase. 20 The limitation or limitations that are applicable depend on thetax classification of the charitable organization that is the donee and the natureof the item (money or property) that is contributed. Irrespective of the combinationof charities and gifts, however, an individual’s income tax charitable deductionfor a tax year cannot exceed an amount equal to 50 percent of his or hercontribution base. If a husband and wife file a joint return, the deduction forcharitable contributions is the aggregate of the contributions made by the spousesand the percentage limitations are based on the aggregate contribution of thespouses. 21The percentage limitation (or limitations) that is applicable depends, in part,on whether the charitable recipient is public or private. 22Contributions of money to public charitable organizations, in a tax year, aredeductible in an amount not in excess of 50 percent of the individual donor’scontribution base for that year. 23 The 50 percent limitation also applies withrespect to gifts of tangible personal property that have been reduced by the capitalgain element because the property was put to an unrelated use by the doneecharitable organization. 2416 IRC §§ 241-247, 249-250.17 IRC § 172.18 IRC § 1212(a)(1).19 E.g., Reg. § 1.170A-8(d)(2)(ii).20 Reg. § 1.170A-8(a)(1).21 Reg. § 1.170A-8(a)(1). See § 7.16.22 See § 3.4.23 IRC § 170(b)(1)(A); Reg. § 1.170A-8(b). See § 7.5.24 IRC § 170(b)(1)(C)(i). 191