Contents

PERCENTAGE LIMITATIONStypes of gifts are made and/or differing categories of charitable organizationsare recipients of the gifts.When an individual contributes cash to public and private charities in thesame year, there is an interplay between the 50 percent limitation and the 30 percentlimitation. 109 When an individual contributes money and capital gain propertyto one or more public charities in the same year, there is an interplaybetween the 50 percent limitation and the special 30 percent limitation. Also,there can be an interplay between percentage limitations when capital gainproperty is contributed in the same year to both one or more public charities andone or more charitable organizations that are not public ones. In some instances,all of the percentage limitations are applicable.No matter what the mix of gift subjects and gift recipients may be, the maximumamount that may be deducted by an individual in any one year, as theresult of one or more charitable gifts, is an amount equal to 50 percent of thedonor’s contribution base. Contributions of money to public charitable organizationsare considered before contributions of money to charitable organizationsthat are not public charitable organizations. Contributions of money are takeninto account before contributions of capital gain property. Contributions of capitalgain property to public charitable organizations are taken into account beforecontributions of such property to nonpublic charitable organizations.When the documentation is not precise, the charitable contribution deductionis likely to default to the 20 percent limitation. For example, in one instance,the IRS, having ruled that two trusts qualified as charitable remainder unitrusts,110 pointed out that the power of certain individuals to name charitablebeneficiaries was not confined to the naming of public charities. Therefore,because of the possibility that a private foundation might be designated as abeneficiary, the IRS ruled that charitable contributions to the trust were limited,for deduction purposes, to the 20 percent limitation. 111Charitable gift amounts that exceed these various limitations can be, as discussedin the preceding sections of this chapter, carried forward and be potentiallydeductible in subsequent years. Just as there can be an interplay of giftsand money in the same year, however, there can be an interplay of two or moreyears in conjunction with a single gift (because of one or more carryovers). Incomputing allowable deductions for that year, a charitable contribution in a currentyear is considered before taking into account contribution deductions basedon carryovers. 112§ 7.15 INDIVIDUALS’ NET OPERATING LOSS CARRYOVERSAND CARRYBACKSAn individual having a net operating loss carryover 113 from a prior tax year,which is available as a deduction in a contribution year, must apply a special109See § 7.9.110See Chapter 12.111Priv. Ltr. Rul. 9252023.112IRC § 170(d)(1); Reg. §§ 1.170A-8, 1.170A-10.113IRC § 172. 212