Charitable Contributions: Do You Deduct Basis or Fair Value?
The deduction depends on what was donated, how long it was held, who received it, and the applicable limitation rules.
Cash contributions
Cash gifts to qualifying organizations are straightforward in valuation, but percentage limitations and substantiation requirements still matter.
Appreciated property
Long-term appreciated property can receive favorable treatment under applicable rules when donated to qualifying organizations, but not every property donation receives a fair-value deduction.
Ordinary-income property
Certain property can have the deduction reduced to reflect built-in ordinary income.
Capital gain property
Treatment can depend on holding period, organization type, use of property, elections, and percentage limitations.
AGI limitations and carryforward
Contribution deductions can be limited to specified percentages of contribution base or AGI, with unused qualifying amounts generally carried forward for a limited period under applicable rules.
The takeaway
Donation amount is not simply whatever the asset is worth. Classification controls the deduction.
Related Summit guides
FAQ
Can appreciated property produce a fair-value deduction?
Potentially, depending on the facts and rules.
Do charitable deductions have AGI limits?
Yes.
Can unused deductions carry forward?
Generally yes, subject to applicable limits.