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§ 7.7 ELECTABLE 50 PERCENT LIMITATIONwho filed a joint return with his or her former spouse for a contribution year andthereafter filed a joint return with his or her present spouse must treat the carryoverto the election year as provided under the rules 79 concerning carryovers ofexcess contributions. 80When this election is made, the charitable contribution deduction must bereduced by application of the deduction reduction rule. 81 If the property that isthe subject of the gift is tangible personal property, the charitable deduction thatwould otherwise be determined must be reduced as provided for in the deductionreduction rule applicable to gifts of this type of property that are put to anunrelated use. 82 This second rule applies (1) even though the gift property is infact clearly put to a related use 83 and (2) irrespective of whether the gift is an outrightgift or conveys an undivided fractional interest in the property. 84Moreover, when this election is made (and the deduction reduction rule istriggered), and the charitable contribution is of less than the donor’s entire interestin the property contributed, the donor’s adjusted basis in the property mustbe allocated between the interest contributed and any interest not contributed. 85An example of this situation is presented in an IRS private letter ruling for adonor who contributed undivided fractional interests in works of art to amuseum; the IRS pointed out that if the 50 percent limitation was elected, thededuction reduction rule and the basis allocation rule would apply. 86 The IRSruled that, in this instance, the amount of the income tax charitable contributionattributable to any gift would equal theproduct of (a) such fraction times (b) another fraction, the numerator of which isthe [d]onor’s adjusted basis in her interest in the work immediately precedingthe gift of the fractional interest, and the denominator of which is the fractionrepresenting the portion of the [d]onor’s ownership in the entire work immediatelypreceding the gift of the fractional interest. 87This election is made by attaching to the federal income tax return for theyear of the election a statement indicating that the election is being made. Preferably,the statement will refer to the appropriate sections of the Internal RevenueCode 88 and, ideally, of the regulations. 89 If there is a carryover to the tax year ofany charitable contributions of capital gain property from a previous tax year oryears, the statement must show the recomputation 90 of the carryover, settingforth sufficient information with respect to the previous tax year or any interveningyear to show the basis of the recomputation. The statement must indicatethe district director of the IRS, or the director of the Internal Revenue Service79Reg. § 1.170A-10(d)(4)(ii).80Reg. § 1.170A-8(d)(ii).81See § 4.4.82See § 4.6.83E.g., Priv. Ltr. Rul. 9303007.84Id. The rules concerning gifts of undivided interests are the subject of § 15.3.85IRC § 170(e)(2).86Priv. Ltr. Rul. 9303007.87Id. This rule is formulated in Reg. § 1.170A-4(c)(1)(ii).88IRC § 170(b)(1)(C)(iii).89Reg. § 1.170A-8(d)(2)(i).90Reg. §§ 1.170A-8(d)(2), 1.170A-4. 205