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SPECIAL GIFT SITUATIONSright to the income from the contracts representing short-term capital gain. 561The IRS asserted that this was a nondeductible gift of a partial interest. Thecourt, however, did not view these portions of gains as substantial interests orrights owned by the donors 562 that could not be divided in donating a portion ofa futures contract. The charitable deduction was allowed, inasmuch as thedonors did not retain any interest in the portion of the futures contracts that theydonated to the charitable organization. The contribution was held to be of anundivided portion of the donors’ entire interest in the futures contracts, namely,the segment of the contracts representing long-term capital gain. 563The IRS wrote that, in enacting this rule, Congress “was concerned with situationsin which taxpayers might obtain a double benefit by taking a deductionfor the present value of a contributed interest while also excluding from incomesubsequent receipts from the donated interest.” Also, the agency wrote that Congress“was concerned with situations in which, because the charity does notobtain all or an undivided portion of significant rights in the property, the amountof a charitable contribution deduction might not correspond to the value of thebenefit ultimately received by the charity.” The legislative solution, said the IRS,“was to guard against the possibility that such problems might arise by denyinga deduction in situations involving partial interests, unless the contribution is castin certain prescribed forms.” The scope of this rule “thus extends beyond situationsin which there is actual or probable manipulation of the non-charitableinterest to the detriment of the charitable interest, or situations in which thedonor has merely assigned the right to future income.” 564§ 9.24 CHARITABLE FAMILY LIMITED PARTNERSHIPSThe IRS is concerned about the growing use of a charitable giving techniqueinvolving what is known as charitable family limited partnerships. The agencywrote that the charitable family limited partnership is a “planned givingscheme” that “may be this year’s [2000’s] favorite charity scam, superseding thecharitable split-dollar transaction.” 565With this approach, a donor having substantially appreciated assets, whichoften are not readily marketable (such as real estate or a proprietary interest in aclosely held business), establishes a family limited partnership. The donor transfersthe appreciated assets to the partnership in exchange for a general and limitedpartnership interest. The general partnership interest constitutes 1 or 2percent of the total partnership interests. The partnership agreement usuallyprovides for a term of 40 to 50 years.The donor contributes a large percentage (e.g., 95 to 98 percent) of the partnershipinterest to a charity, in the form of a limited partnership interest. Thedonor usually retains the general partnership interest. The donor may also retain a561 Greene v. United States, 79 F.3d 1348 (2d Cir. 1996). The facts of this case are detailed in § 4.8, text accompaniedby notes 68–75.562 Reg. § 1.170A-7(b)(1)(i).563 See § 15.3.564 Rev. Rul. 2003-28, 2003-11 I.R.B. 594; Rev. Rul. 88-37, 1988-1 C.B. 97.565 IRS Exempt Organizations Continuing Professional Education Program textbook for fiscal year 2001, at 128.The charitable split-dollar insurance transaction is the subject of § 17.6. 344