The Tax Law of Charitable Giving, 6th Edition

CHAPTER THIRTEENOther Types of Deductible Remainder Interests

• § 13.1 Overview of Law
• § 13.2 Qualifying Partial Interests
• § 13.3 Remainder Interests in Personal Residences or Farms
  • (a) Personal Residence
  • (b) Farm
• § 13.4 Undivided Portions of Entire Interests in Property
  • (a) General Rules
  • (b) Gifts of Certain Fractional Interests

The charitable contribution deduction (if one is available) is for the gift of certain other types of remainder interest.

§ 13.1 OVERVIEW OF LAW

As a general rule, there is no federal income tax deduction for a contribution to a charitable organization, not made by a transfer in trust, of a partial interest in property.¹ Related to this point is the rule of law that a charitable contribution consisting of a transfer of a future interest in tangible personal property is treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the donor or those related to the donor.²

Otherwise, there are few situations in which a federal income tax charitable contribution deduction is available for a nontrust gift of a partial interest. (The rules in this regard are essentially the same in the gift and estate tax setting.³ One exception is the special set of rules concerning certain gifts of works of art, as distinct from the copyrights in them, which can lead to an estate and gift tax charitable deduction.⁴)

Indeed, there are only three of these situations: ...