Following is summary of the effect current tax laws have on the treatment, under the Internal Revenue Code (IRC), of donations of appreciated ordinary income property* when contributed by corporations to charitable organizations. The following information should be used only as a guide. Donors are advised to consult with their tax advisor in applying the appropriate deduction.
Allowable Deductions for Charitable Donations of Ordinary Income Property:
Congress, in the 1976 Tax Reform Act, further refined the statute to allow corporate donors (applicable for C corporations, no S corporations) an increased deduction, under certain circumstances, for contributions or ordinary income property to a public charity or to a private operating foundation.
Under IRC Section 170 (e) (3), a corporation is entitled to a deduction with respect to a contribution to a public charity or to a private operating foundation of appreciated property described in IRC Section 1221 (1) and (2). That is, certain types of ordinary income property in an amount equal to: