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§ 7.6 THIRTY PERCENT LIMITATION FOR GIFTS OF CERTAIN PROPERTYProperty that qualifies for this 30 percent limitation is, as noted, referred tothroughout as capital gain property. 55The fair market value of an item of capital gain property is used in calculatingthe value of the deduction, although the actual deduction for a contributionyear may be less as the result of this (or other) limitation.In general, then, an individual may deduct charitable contributions of capitalgain property made during a tax year to any public charitable organization tothe extent that the contributions in the aggregate do not exceed 30 percent of thedonor’s contribution base. 56EXAMPLE 7.8This example may be compared to Example 7.1. A had, for 2005, a contribution base of$100,000. During 2005, she made charitable contributions using securities that had appreciatedto $45,000 in value, since she acquired them (and were capital gain property). She made thecontributions to a church, a university, and a hospital (each of which is a public charitableorganization). A was allowed a federal income tax charitable contribution deduction for 2005 of$30,000 (30% of $100,000), rather than $45,000 (A’s deduction in Example 7.1).The full 30 percent limitation may not always apply, however, which is tosay that the allowable amount for a contribution year may be less. This isbecause contributions of money to public charitable organizations, and theapplicable percentage limitations, have to be taken into account first. 57 In thisprocess, the value of the capital gain property contributed to public charitableorganizations that must be used is the full fair market value, not the amount limitedby the 30 percent rule. 58The federal income tax law thus establishes an order of priority for categoriesof gifts to public charitable organizations, which can determine the deductibilityof charitable gifts. The federal income tax law favors the giving of money,rather than property, to public charitable organizations. Therefore, when computingcurrent or carried-forward charitable deductions, contributions of moneyto public charitable organizations are, as noted, considered first.This rule is illustrated by the following example:EXAMPLE 7.9C, an individual, had a contribution base for 2005 of $100,000. During that year, C made a giftof capital gain property to PC, a public charitable organization, in the amount of $10,000.During that year, C also contributed $45,000 in money to PC. C’s federal income tax charitablecontribution deduction for 2005 was $50,000 (50% of $100,000), consisting of the $45,000 ofmoney and $5,000 of the gift of property. Thus, even though the value of the capital gainproperty, taken alone, was less than 30 percent of C’s contribution base, only a portion of it($5,000) was deductible for 2005 income tax purposes.55 IRC § 170(b)(1)(C)(iv); Reg. § 1.170A-8(d)(3).56 IRC § 170(b)(1)(C)(i); Reg. § 1.170A-8(d)(1).57 IRC § 170(b)(1)(C)(i); Reg. § 1.170A-8(d)(1). One category of gifts that is not considered in this regard iscontributions of capital gain property to charitable organizations that are not public charitable organizations.See § 7.12.58 IRC § 170(b)(1)(B)(ii); Reg. § 1.170A-8(c)(2)(ii). 199