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§ 7.7 ELECTABLE 50 PERCENT LIMITATIONdeduction so allowed in the preceding tax year must, however, be subtractedfrom the reduced amount of the charitable contributions made in that year (thatis, the capital gain element must be subtracted) to determine the excess amountcarried over from that year. If the amount of the deduction so allowed in the precedingtax year equals or exceeds the reduced amount of the charitable contributions,there may not be any carryover from that year to the year of the election. 73This election may be made for each tax year in which a charitable contributionof capital gain property is made or to which the charitable deduction is carriedover under the rules of the 30 percent limitation. 74 If there are also carryovers,under the general rules concerning carryovers of excess contributions, 75 to the yearof the election by reason of this election for a previous tax year, these carryoversmay not be redetermined by reason of the subsequent election. 76 When the electionis made, however, it must apply with respect to all contributions of capital gainproperty made to public charitable organizations during the contribution year. 77These rules may be illustrated by the following two examples:EXAMPLE 7.11H had a contribution base for 2005 of $100,000 and for 2006 of $120,000. In 2005, H madea contribution of capital gain property to a public charitable organization, PC, having a fairmarket value of $40,000 and a basis of $25,000. In 2006, H made a contribution of capitalgain property to PC having a fair market value of $50,000 and a basis of $45,000. H did notmake any other charitable gifts during those years. H did not make the election for 2005.Therefore, H properly claimed a charitable contribution deduction for that year in the amountof $30,000 (30% of $100,000) and carried forward the amount of $10,000 ($40,000 −$30,000).H elected to have the 50 percent limitation apply to his contribution of $50,000 in 2006.Accordingly, H was required to recompute his carryover from 2005 as if the deductionreduction rule had applied to his contribution of capital gain property in that year.If the deduction reduction rule had applied in 2005 to H’s contribution of capital gainproperty, the amount of H’s contribution for these purposes would have been reduced from$40,000 to $25,000, the reduction of the $15,000 being all of the gain ($40,000 − $25,000)that would have been long-term capital gain had H sold the property at its fair market value atthe time of its contribution in 2005. Accordingly, by taking this election into account, H did nothave a recomputed carryover to 2006, because the $25,000 was fully deductible in 2005 (H’smaximum charitable deduction in that year was $30,000 (30% of $100,000)). H’s charitablecontribution deduction of $30,000 allowed for 2005, however, did not have to be recomputedby reason of this election.Pursuant to the election for 2006, the contribution of capital gain property for that year wasreduced from $50,000 to $45,000, the reduction of $5,000 being all of the gain of $5,000($50,000 − $45,000) that would have been long-term capital gain had H sold the property at itsfair market value at the time of its contribution in 2005. Accordingly, H was allowed a charitablecontribution deduction for 2006 of $45,000, rather than of $36,000 (30% of $120,000) had theelection not been made.73Id.74See text accompanied by note 65.75See text accompanied by note 49.76Reg. § 1.170A-8(d)(2)(i)(c).77IRC § 170(b)(1)(C)(iii); Reg. § 1.170A-8(d)(2). 203