Contents

LEGISLATIVE UPDATEIncreased Reporting for Noncash Charitable Contributions(Act § 883; book §§ 21.2, 21.3)In the case of an individual, partnership, or corporation, an income tax charitablededuction for a contribution of property, for which a deduction of more than$500 is claimed, is not allowed unless the donor satisfies certain requirements(IRC § 170(f)(11)).One requirement is that the donor must include a description of the propertywith the tax return on which the deduction is claimed. This rule, however,does not apply to a C corporation which is not a personal service corporation ora closely held C corporation.If a claimed deduction is more than $5,000, the individual, partnership, orcorporation must obtain a qualified appraisal of the property and attach to theappropriate income tax return such information about the property as the IRSmay require. If a claimed deduction is over $500,000, the individual, partnership,or corporation must obtain a qualified appraisal of the property and attach acopy of it to the appropriate income tax return. These two rules are inapplicable,however, with respect to gifts of money, publicly traded securities, inventory,and certain qualified vehicles.Native Alaskan Subsistence Whaling Expenses (Act § 335)A whaling captain charged with the responsibility of maintaining and carryingout sanctioned whaling activities, and does so during the tax year involved, is entitledto a federal income tax charitable contribution deduction for whalingexpenses (up to $10,000 annually) (IRC § 170(n)). Availability of this deduction issubject to certain substantiation rules.WORKING FAMILIES TAX RELIEF ACTThe Working Families Tax Relief Act contains the following provisions directlypertaining to the tax law of charitable giving:Contributions of Computer Technology and Equipment (Act § 306; book § 9.5)The rules concerning charitable contributions of computer technology andequipment used for educational purposes were extended for such gifts madebefore January 1, 2006.Tax Brackets (Act § 101; book § 2.15)The 15-percent rate bracket for married couples filing joint returns has beenincreased, effective for 2005-2007. The size of 10-percent rate bracket for individualshas been extended through 2010. xxii