Contents

§ 7.18 PERCENTAGE LIMITATION FOR CORPORATIONSpart) as paid in the year, the donor must attach to his or her return a statementshowing the following:• The contribution year (or years) in which the excess charitable contributionswere made• The excess charitable contributions made in each contribution year, andthe amount of the excess charitable contributions consisting of capitalgain property• The portion of the excess, or of each excess, treated as paid in any tax yearintervening between the contribution year and the tax year for which thereturn is filed, and the portion of the excess that consists of capital gainproperty• Whether or not an election has been made under the rules allowing the 50percent limitation with respect to contributions of capital gain property, 125so as to affect any of the excess contributions of capital gain property• Whatever other information the tax returns or the instructions accompanyingthem may reasonably require 126§ 7.18 PERCENTAGE LIMITATION FOR CORPORATIONS(a) General RulesThe deduction in a tax year for charitable contributions by a corporation subjectto income taxation is limited to 10 percent of the corporation’s taxable incomefor the year, computed with certain adjustments. 127Much of the foregoing law as to the characterization of property is equallyapplicable to contributions by corporations. For example, the general rule is thata deduction for a charitable gift of a capital asset by a corporation is determinedusing the fair market value of the property at the time of the gift. A corporationmay, however, donate to charity what is known as a corporate archive. In one ofthese instances, the gift was of a newspaper clipping library by a newspaperpublisher. 128 In another instance, a broadcasting company contributed a filmlibrary, consisting of footage documenting local news stories. 129 These archiveswere compiled and maintained by employees of the company. The IRS held inthese cases that the items were property similar to a letter or memorandum preparedor produced for the donor, and therefore were excluded from the definitionof capital asset. 130 Thus, the amount of the gift had to be confined to thedonor’s basis in the property (if any). 131125 See § 7.7.126 Reg. § 1.170A-10(e).127 IRC § 170(b)(2); Reg. § 1.170A-11(a). These rules do not apply in the case of S corporations. See § 6.13. Charitablecontributions by S corporations pass through to the shareholders and are subject to the limitations ondeductibility applicable to individuals. IRC § 1366.128 Chronicle Publ’g Co. v. Commissioner; 97 T.C. 445 (1991), reconsideration denied, 63 T.C.M. (CCH) 1899(1992).129 Tech. Adv. Mem. 200119005.130 IRC § 1221(3)(B). See § 2.16(a), fifth bulleted item.131 IRC § 170(e)(1)(A). See § 4.4(b). 219