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OTHER ASPECTS OF DEDUCTIBLE GIVING§ 10.6 ALTERNATIVE MINIMUM TAX CONSIDERATIONSThe federal tax law includes an alternative minimum tax. 162 This tax is termed analternative tax because it may be paid instead of the regular income tax. It iscalled a minimum tax because it is designed to force persons of wealth to paysome federal tax, notwithstanding the sophistication of their tax planning.Some persons are able to avoid taxation, in whole or in part, through the useof deductions, credits, exemptions, and the like. These items are generally knownas items of tax preference or tax preference items. A general summary of the alternativeminimum tax is that it is a tax, albeit computed with some adjustments, onmany of a person’s tax preference items.The charitable community and the alternative minimum tax have a precariouscoexistence. This is because, as a general rule, the donor of an item of appreciatedproperty contributed to a public charity escapes taxation on the capital gaininherent in the property. 163 This feature of the federal income tax law is a majorincentive for charitable giving. There are those, however, who assert that—if onlyas a matter of pure tax policy—this capital gain should be subject to some taxation.One option in this regard is to subject this gain to the alternative minimumtax. Congress experimented with this approach. Thus, for a period of about sixyears, the appreciation element inherent in a charitable contribution of appreciatedproperty was considered an item of tax preference for purposes of the alternativeminimum tax. 164In 1986, a rule was adopted that, for purposes of computing alternative minimumtaxable income, the deduction for charitable contributions of capital gainproperty (real, tangible personal, or intangible personal) is disallowed to theextent that the fair market value of the property exceeds its adjusted basis. Thisrule was a compromise in the face of an effort to subject this type of appreciationelement to the regular capital gains tax. The charitable community that is highlydependent upon contributions of appreciated property (such as institutions ofhigher education and museums) thereafter experienced a substantial decline ingiving of property and began to work to change, if not eliminate, the rule.This effort was successful. First Congress created a partial and temporaryexception in 1990. Then Congress attempted to permanently repeal the applicationof the alternative minimum tax to charitable giving in 1992, although thisundertaking failed. Nonetheless, the legislative history of this potential lawchange offered the following explanation:The [Senate Finance] [C]ommittee believes that the temporary AMT [alternativeminimum tax] exception for contributions of appreciated tangible personalproperty has induced additional charitable giving. Thus, bypermanently extending this rule and expanding it to apply to all appreciatedproperty gifts, taxpayers will be allowed the same charitable contributiondeduction for both regular tax and alternative minimum tax purposes. Thiswill provide an additional incentive for taxpayers to make contributions ofappreciated property. 165162 IRC §§ 55–59.163 See § 4.3.164 Former IRC § 57(a)(6). 378