U.S. Master Tax Guide (2011), 1058. Contributions by Individuals
Generally, contributions to charitable organizations are deductible, subject to certain limits. The charitable deduction
for any one tax year is limited to a percentage of the individual taxpayer's contribution base, which is the taxpayer's
adjusted gross income (AGI), computed without regard to any net operating loss carryback ( Code Sec. 170(b)
(1)(G)). 15-4 The percentage limitation is determined by two factors: the type of organization receiving the donation
and the type of property donated ( Code Sec. 170(b)(1)). 155 Any amount in excess of the percentage limitation for
the tax year may be carried forward for a period of five years (¶1060) ( Code Sec. 170(d)). 156 When spouses file a
joint return, the percentage limitation depends on their aggregate contribution base ( Reg. §1.170A-8(a)). 1.51 A limit
also applies to the amount of a charitable deduction allowed for gifts of appreciated property ( ¶1062), and is
imposed before applying the percentage limitation ( Code Sec. 170(e); Reg. §1.170A-4).15-15 Contributions are
reported on Schedule A of Form 1040. See ¶1061 for discussion of what contributions are deductible.
Except for the carryover rule at ¶1060, a contribution is generally deductible only in the year of payment ( Reg.
§1.170A-1(a)). 152 However, contributions charged to a bank credit card are deductible in the year charged even
though paid in a later year ( Rev. Rul. 78-38). 160
Taxpayers who are recognized by the Alaska Eskimo Whaling Commission as whaling captains can claim a
charitable contribution deduction of up to $10,000 per tax year for reasonable and necessary expenses paid in
carrying out sanctioned Alaskan subsistence whale hunting activities ( Code Sec. 170(n)). 161
IRA Distributions. In 2010 and 2011 (as in 2006 through 2009), individuals age 70 % or older can distribute up to
$100,000 tax-free from their individual retirement accounts (IRAs) to certain charitable organizations without including
the distribution in gross income ( Code Sec. 408isa(8), as amended by the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 (E. 111-312)). To qualify, the distribution must be made directly by
the trustee to a 50-percent organization ( ¶1059), but not to a supporting organization or a donor advised fund
¶1061), and the entire distribution must otherwise be deductible under Code Sec. 170 (disregarding the percentage
limitations) even though the individual cannot claim a charitable deduction for the donation. The distribution can be
delivered to the charity by the IRA owner provided that the check from the IRA is payable to the charity ( Notice
2007-7). 16 2 See ¶2153G for a special rule that permits a qualified charitable distribution made in January 2011 to be
treated as having been made on December 31, 2010.
Footnotes
154 FED ¶11,600 INDIV: 51,250 PTE §7,501, PTE §7,565.05
155 FED ¶11,600 INDIV: 51,256 PTE §7,501
FED ¶11,600 INDIV: 51,262 PTE §7,570.05
157 FED¶11,661 INDIV: 51,252 PTE §7,565.05
158 FED ¶11,600, FED ¶11,632 INDIV: 51,200 PTE §7,525.05, PTE §7,565.05
159 FED ¶11,615 INDIV: 51,402 PTE §7,505.10
160 FED¶11,620.691 INDIV: 51,416 PTE §7,505.10
161 FED ¶11,600 INDIV: 51,052.55 PTE §7,540
/62 FED¶18,902, FED ¶18,922.745 RETIRE: 66,502, RETIRE: 66,758 PTE §25,450.35
O2011 Wolters Kluwer. All rights reserved.
I of I 7/28/2011 8:00 AM
EFTA00598317