Page 173 - Washington Nonprofit Handbook 2018 Edition

“Charitable deduction property” is property other than money for which a
donor claimed a charitable deduction based on a claimed value that, when added
to the claimed value of all similar items of property donated by the donor to one or
more donees, exceeds $5,000. See Code section 6050L(a)(2)(A). Publicly traded
securities for which market quotations were readily available on an established
securities market when the contribution was made are not charitable deduction
property and are disregarded in applying the $5,000 threshold. See Code section
6050L(a)(2)(B). The donee must furnish a copy of the return to the donor. See Code
section 6050L(c).

If the original donee transfers the property to another charitable
organization within three years, the original donee should provide a copy of its
report on the transfer to the successor donee, and the successor donee should also
report any disposition it makes within three years after the original gift. See Treas.
Reg. section 1.6050L-1(c). The return is due 125 days after a disposition triggering
the obligation to file. See Treas. Reg. section 1.6050L-1(f). The information return is
excused in three situations:

• First, it need not be filed if the gift is of money or publicly traded
securities or if, for some other reason, the donee is not required to
sign an appraisal summary under the donor substantiation rules
described above. See Treas. Reg. section 1.6050L-1(e).

• Second, no return is required to report the sale of an item if the donor
attests in the appraisal summary that the item’s appraised value does
not exceed $500. See Treas. Reg. section 1.6050L-1(a)(2).

• Third, the return need not be filed if the property is consumed by the
donee in the pursuit of its charitable purposes. See Treas. Reg. section
1.6050L-1(a)(3).

f. Gifts of Vehicles

If the claimed value of a charitable gift of a qualified vehicle exceeds $500, no
deduction is allowed for the gift unless the donor substantiates it with a
contemporaneous written acknowledgment from the donee organization and
includes the acknowledgment with the return on which the deduction is claimed.
Even if so substantiated, the deduction may not exceed the donee’s gross proceeds
on selling the vehicle unless the donee uses the vehicle in its charitable activities or
materially improves it. See Code section 170(f)(12).

WASHINGTON NONPROFIT HANDBOOK -162- 2018