[Code of Federal Regulations]
[Title 26, Volume 3]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.170A-13]

[Page 133-149]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec.  1.170A-13  Recordkeeping and return requirements for deductions 
for charitable contributions.

    (a) Charitable contributions of money made in taxable years 
beginning after December 31, 1982--(1) In general. If a taxpayer makes a 
charitable contribution of money in a taxable year beginning after 
December 31, 1982, the taxpayer shall maintain for each contribution one 
of the following:
    (i) A cancelled check.
    (ii) A receipt from the donee charitable organization showing the 
name of the donee, the date of the contribution, and the amount of the 
contribution. A letter or other communication from the donee charitable 
organization acknowledging receipt of a contribution and showing the 
date and amount of the contribution constitutes a receipt for purposes 
of this paragraph (a).
    (iii) In the absence of a canceled check or receipt from the donee 
charitable organization, other reliable written records showing the name 
of the donee, the date of the contribution, and the amount of the 
contribution.
    (2) Special rules--(i) Reliability of records. The reliability of 
the written records described in paragraph (a)(1)(iii) of this section 
is to be determined on the basis of all of the facts and circumstances 
of a particular case. In all events, however, the burden shall be on the 
taxpayer to establish reliability. Factors indicating that the written 
records are reliable include, but are not limited to:
    (A) The contemporaneous nature of the writing evidencing the 
contribution.
    (B) The regularity of the taxpayer's recordkeeping procedures. For 
example, a contemporaneous diary entry stating the amount and date of 
the donation and the name of the donee charitable organization made by a 
taxpayer who regularly makes such diary entries would generally be 
considered reliable.
    (C) In the case of a contribution of a small amount, the existence 
of any written or other evidence from the donee charitable organization 
evidencing receipt of a donation that would not otherwise constitute a 
receipt under paragraph (a)(1)(ii) of this section (including an emblem, 
button, or other token traditionally associated with a charitable 
organization and regularly given by the organization to persons making 
cash donations).
    (ii) Information stated in income tax return. The information 
required by paragraph (a)(1)(iii) of this section shall be stated in the 
taxpayer's income tax return if required by the return form or its 
instructions.
    (3) Taxpayer option to apply paragraph (d)(1) to pre-1985 
contribution. See paragraph (d)(1) of this section with regard to 
contributions of money made on or before December 31, 1984.
    (b) Charitable contributions of property other than money made in 
taxable years beginning after December 31, 1982--(1) In general. Except 
in the case of certain charitable contributions of property made after 
December 31, 1984, to which paragraph (c) of this section applies, any 
taxpayer who makes a charitable contribution of property other than 
money in a taxable year beginning after December 31, 1982, shall 
maintain for each contribution a receipt from the donee showing the 
following information:
    (i) The name of the donee.
    (ii) The date and location of the contribution.
    (iii) A description of the property in detail reasonably sufficient 
under the circumstances. Although the fair market value of the property 
is one of the circumstances to be taken into account in determining the 
amount of detail to be included on the receipt, such value need not be 
stated on the receipt.

A letter or other written communication from the donee acknowledging 
receipt of the contribution, showing the

[[Page 134]]

date of the contribution, and containing the required description of the 
property contributed constitutes a receipt for purposes of this 
paragraph. A receipt is not required if the contribution is made in 
circumstances where it is impractical to obtain a receipt (e.g., by 
depositing property at a charity's unattended drop site). In such cases, 
however, the taxpayer shall maintain reliable written records with 
respect to each item of donated property that include the information 
required by paragraph (b)(2)(ii) of this section.
    (2) Special rules--(i) Reliability of records. The rules described 
in paragraph (a)(2)(i) of this section also apply to this paragraph (b) 
for determining the reliability of the written records described in 
paragraph (b)(1) of this section
    (ii) Content of records. The written records described in paragraph 
(b)(1) of this section shall include the following information and such 
information shall be stated in the taxpayers income tax return if 
required by the return form or its instructions:
    (A) The name and address of the donee organization to which the 
contribution was made.
    (B) The date and location of the contribution.
    (C) A description of the property in detail reasonable under the 
circumstances (including the value of the property), and, in the case of 
securities, the name of the issuer, the type of security, and whether or 
not such security is regularly traded on a stock exchange or in an over-
the-counter market.
    (D) The fair market value of the property at the time the 
contribution was made, the method utilized in determining the fair 
market value, and, if the valuation was determined by appraisal, a copy 
of the signed report of the appraiser.
    (E) In the case of property to which section 170(e) applies, the 
cost or other basis, adjusted as provided by section 1016, the reduction 
by reason of section 170(e)(1) in the amount of the charitable 
contribution otherwise taken into account, and the manner in which such 
reduction was determined. A taxpayer who elects under paragraph (d)(2) 
of Sec.  1.170A-8 to apply section 170(e)(1) to contributions and 
carryovers of 30 percent capital gain property shall maintain a written 
record indicating the years for which the election was made and showing 
the contributions in the current year and carryovers from preceding 
years to which it applies. For the definition of the term ``30-percent 
capital gain property,'' see paragraph (d)(3) of Sec.  1.170A-8.
    (F) If less than the entire interest in the property is contributed 
during the taxable year, the total amount claimed as a deduction for the 
taxable year due to the contribution of the property, and the amount 
claimed as a deduction in any prior year or years for contributions of 
other interests in such property, the name and address of each 
organization to which any such contribution was made, the place where 
any such property which is tangible property is located or kept, and the 
name of any person, other than the organization to which the property 
giving rise to the deduction was contributed, having actual possession 
of the property.
    (G) The terms of any agreement or understanding entered into by or 
on behalf of the taxpayer which relates to the use, sale, or other 
disposition of the property contributed, including for example, the 
terms of any agreement or understanding which:
    (1) Restricts temporarily or permanently the donee's right to use or 
dispose of the donated property,
    (2) Reserves to, or confers upon, anyone (other than the donee 
organization or an organization participating with the donee 
organization in cooperative fundraising) any right to the income from 
the donated property or to the possession of the property, including the 
right to vote donated securities, to acquire the property by purchase or 
otherwise, or to designate the person having such income, possession, or 
right to acquire, or
    (3) Earmarks donated property for a particular use.
    (3) Deductions in excess of $500 claimed for a charitable 
contribution of property other than money--(i) In general. In addition 
to the information required under paragraph (b)(2)(ii) of this section, 
if a taxpayer makes a charitable contribution of property other than 
money in a taxable year beginning

[[Page 135]]

after December 31, 1982, and claims a deduction in excess of $500 in 
respect of the contribution of such item, the taxpayer shall maintain 
written records that include the following information with respect to 
such item of donated property, and shall state such information in his 
or her income tax return if required by the return form or its 
instructions:
    (A) The manner of acquisition, as for example by purchase, gift 
bequest, inheritance, or exchange, and the approximate date of 
acquisition of the property by the taxpayer or, if the property was 
created, produced, or manufactured by or for the taxpayer, the 
approximate date the property was substantially completed.
    (B) The cost or other basis, adjusted as provided by section 1016, 
of property, other than publicly traded securities, held by the taxpayer 
for a period of less than 12 months (6 months for property contributed 
in taxable years beginning after December 31, 1982, and on or before 
June 6, 1988, immediately preceding the date on which the contribution 
was made and, when the information is available, of property, other than 
publicly traded securities, held for a period of 12 months or more (6 
months or more for property contributed in taxable years beginning after 
December 31, 1982, and on or before June 6, 1988, preceding the date on 
which the contribution was made.
    (ii) Information on acquisition date or cost basis not available. If 
the return form or its instructions require the taxpayer to provide 
information on either the acquisition date of the property or the cost 
basis as described in paragraph (b)(3)(i) (A) and (B), respectively, of 
this section, and the taxpayer has reasonable cause for not being able 
to provide such information, the taxpayer shall attach an explanatory 
statement to the return. If a taxpayer has reasonable cause for not 
being able to provide such information, the taxpayer shall not be 
disallowed a charitable contribution deduction under section 170 for 
failure to comply with paragraph (b)(3)(i) (A) and (B) of the section.
    (4) Taxpayer option to apply paragraph (d) (1) and (2) to pre-1985 
contributions. See paragraph (d) (1) and (2) of this section with regard 
to contributions of property made on or before December 31, 1984.
    (c) Deductions in excess of $5,000 for certain charitable 
contributions of property made after December 31, 1984--(1) General 
Rule--(i) In general. This paragraph applies to any charitable 
contribution made after December 31, 1984, by an individual, closely 
held corporation, personal service corporation, partnership, or S 
corporation of an item of property (other than money and publicly traded 
securities to which Sec.  1.170A-13(c)(7)(xi)(B) does not apply if the 
amount claimed or reported as a deduction under section 170 with respect 
to such item exceeds $5,000. This paragraph also applies to charitable 
contributions by C corporations (as defined in section 1361(a)(2) of the 
Code) to the extent described in paragraph (c)(2)(ii) of this section. 
No deduction under section 170 shall be allowed with respect to a 
charitable contribution to which this paragraph applies unless the 
substantiation requirements described in paragraph (c)(2) of this 
section are met. For purposes of this paragraph (c), the amount claimed 
or reported as a deduction for an item of property is the aggregate 
amount claimed or reported as a deduction for a charitable contribution 
under section 170 for such items of property and all similar items of 
property (as defined in paragraph (c)(7)(iii) of this section) by the 
same donor for the same taxable year (whether or not donated to the same 
donee).
    (ii) Special rule for property to which section 170(e) (3) or (4) 
applies. For purposes of this paragraph (c), in computing the amount 
claimed or reported as a deduction for donated property to which section 
170(e) (3) or (4) applies (pertaining to certain contributions of 
inventory and scientific equipment) there shall be taken into account 
only the amount claimed or reported as a deduction in excess of the 
amount which would have been taken into account for tax purposes by the 
donor as costs of goods sold if the donor had sold the contributed 
property to the donee. For example, assume that a donor makes a 
contribution from inventory of clothing for the care of the needy to 
which section 170(e)(3) applies. The cost

[[Page 136]]

of the property to the donor was $5,000, and, pursuant to section 
170(e)(3)(B), the donor claims a charitable contribution deduction of 
$8,000 with respect to the property. Therefore, $3,000 ($8,000-$5,000) 
is the amount taken into account for purposes of determining whether the 
$5,000 threshold of this paragraph (c)(1) is met.
    (2) Substantiation requirements--(i) In general. Except as provided 
in paragraph (c)(2)(ii) of this section, a donor who claims or reports a 
deduction with respect to a charitable contribution to which this 
paragraph (c) applies must comply with the following three requirements:
    (A) Obtain a qualified appraisal (as defined in paragraph (c) (3) of 
this section) for such property contributed. If the contributed property 
is a partial interest, the appraisal shall be of the partial interest.
    (B) Attach a fully completed appraisal summary (as defined in 
paragraph (c) (4) of this section) to the tax return (or, in the case of 
a donor that is a partnership or S corporation, the information return) 
on which the deduction for the contribution is first claimed (or 
reported) by the donor.
    (C) Maintain records containing the information required by 
paragraph (b) (2) (ii) of this section.
    (ii) Special rules for certain nonpublicly traded stock, certain 
publicly traded securities, and contributions by certain C corporations. 
(A) In cases described in paragraph (c)(2)(ii)(B) of this section, a 
qualified appraisal is not required, and only a partially completed 
appraisal summary form (as described in paragraph (c)(4)(iv)(A) of this 
section) is required to be attached to the tax or information return 
specified in paragraph (c)(2)(i)(B) of this section. However, in all 
cases donors must maintain records containing the information required 
by paragraph (b)(2)(ii) of this section.
    (B) This paragraph (c)(2)(ii) applies in each of the following 
cases:
    (1) The contribution of nonpublicly traded stock, if the amount 
claimed or reported as a deduction for the charitable contribution of 
such stock is greater than $5,000 but does not exceed $10,000;
    (2) The contribution of a security to which paragraph (c)(7)(xi)(B) 
of this section applies; and
    (3) The contribution of an item of property or of similar items of 
property described in paragraph (c)(1) of this section made after June 
6, 1988, by a C corporation (as defined in section 1361(a)(2) of the 
Code), other than a closely held corporation or a personal service 
corporation.
    (3) Qualified appraisal--(i) In general. For purposes of this 
paragraph (c), the term ``qualified appraisal'' means an appraisal 
document that--
    (A) Relates to an appraisal that is made not earlier than 60 days 
prior to the date of contribution of the appraised property nor later 
than the date specified in paragraph (c)(3)(iv)(B) of this section;
    (B) Is prepared, signed, and dated by a qualified appraiser (within 
the meaning of paragraph (c)(5) of this section);
    (C) Includes the information required by paragraph (c)(3)(ii) of 
this section; and
    (D) Does not involve an appraisal fee prohibited by paragraph (c)(6) 
of this section.
    (ii) Information included in qualified appraisal. A qualified 
appraisal shall include the following information:
    (A) A description of the property in sufficient detail for a person 
who is not generally familiar with the type of property to ascertain 
that the property that was appraised is the property that was (or will 
be) contributed;
    (B) In the case of tangible property, the physical condition of the 
property;
    (C) The date (or expected date) of contribution to the donee;
    (D) The terms of any agreement or understanding entered into (or 
expected to be entered into) by or on behalf of the donor or donee that 
relates to the use, sale, or other disposition of the property 
contributed, including, for example, the terms of any agreement or 
understanding that--
    (1) Restricts temporarily or permanently a donee's right to use or 
dispose of the donated property,
    (2) Reserves to, or confers upon, anyone (other than a donee 
organization or an organization participating with a donee organization 
in cooperative fundraising) any right to the income

[[Page 137]]

from the contributed property or to the possession of the property, 
including the right to vote donated securities, to acquire the property 
by purchase or otherwise, or to designate the person having such income, 
possession, or right to acquire, or
    (3) Earmarks donated property for a particular use;
    (E) The name, address, and (if a taxpayer identification number is 
otherwise required by section 6109 and the regulations thereunder) the 
identifying number of the qualified appraiser; and, if the qualified 
appraiser is acting in his or her capacity as a partner in a 
partnership, an employee of any person (whether an individual, 
corporation, or partnerships), or an independent contractor engaged by a 
person other than the donor, the name, address, and taxpayer 
identification number (if a number is otherwise required by section 6109 
and the regulations thereunder) of the partnership or the person who 
employs or engages the qualified appraiser;
    (F) The qualifications of the qualified appraiser who signs the 
appraisal, including the appraiser's background, experience, education, 
and membership, if any, in professional appraisal associations;
    (G) A statement that the appraisal was prepared for income tax 
purposes;
    (H) The date (or dates) on which the property was appraised;
    (I) The appraised fair market value (within the meaning of Sec.  
1.170A-1 (c)(2)) of the property on the date (or expected date) of 
contribution;
    (J) The method of valuation used to determine the fair market value, 
such as the income approach, the market-data approach, and the 
replacement-cost-less-depreciation approach; and
    (K) The specific basis for the valuation, such as specific 
comparable sales transactions or statistical sampling, including a 
justification for using sampling and an explanation of the sampling 
procedure employed.
    (iii) Effect of signature of the qualified appraiser. Any appraiser 
who falsely or fraudulently overstates the value of the contributed 
property referred to in a qualified appraisal or appraisal summary (as 
defined in paragraphs (c) (3) and (4), respectively, of this section) 
that the appraiser has signed may be subject to a civil penalty under 
section 6701 for aiding and abetting an understatement of tax liability 
and, moreover, may have appraisals disregarded pursuant to 31 U.S.C. 
330(c).
    (iv) Special rules--(A) Number of qualified appraisals. For purposes 
of paragraph (c)(2)(i)(A) of this section, a separate qualified 
appraisal is required for each item of property that is not included in 
a group of similar items of property. See paragraph (c)(7)(iii) of this 
section for the definition of similar items of property. Only one 
qualified appraisal is required for a group of similar items of property 
contributed in the same taxable year of the donor, although a donor may 
obtain separate qualified appraisals for each item of property. A 
qualified appraisal prepared with respect to a group of similar items of 
property shall provide all the information required by paragraph 
(c)(3)(ii) of this section for each item of similar property, except 
that the appraiser may select any items whose aggregate value is 
appraised at $100 or less and provide a group description of such items.
    (B) Time of receipt of qualified appraisal. The qualified appraisal 
must be received by the donor before the due date (including extensions) 
of the return on which a deduction is first claimed (or reported in the 
case of a donor that is a partnership or S corporation) under section 
170 with respect to the donated property, or, in the case of a deduction 
first claimed (or reported) on an amended return, the date on which the 
return is filed.
    (C) Retention of qualified appraisal. The donor must retain the 
qualified appraisal in the donor's records for so long as it may be 
relevant in the administration of any internal revenue law.
    (D) Appraisal disregarded pursuant to 31 U.S.C. 330(c). If an 
appraisal is disregarded pursuant to 31 U.S.C. 330(c) it shall have no 
probative effect as to the value of the appraised property. Such 
appraisal will, however, otherwise constitute a ``qualified appraisal'' 
for purposes of this paragraph (c) if the appraisal summary includes the 
declaration described in paragraph (c)(4)(ii)(L)(2) and the taxpayer had 
no

[[Page 138]]

knowledge that such declaration was false as of the time described in 
paragraph (c)(4)(i)(B) of this section.
    (4) Appraisal summary--(i) In general. For purposes of this 
paragraph (c), except as provided in paragraph (c)(4)(iv)(A) of this 
section, the term appraisal summary means a summary of a qualified 
appraisal that--
    (A) Is made on the form prescribed by the Internal Revenue Service;
    (B) Is signed and dated (as described in paragraph (c)(4)(iii) of 
this section) by the donee (or presented to the donee for signature in 
cases described in paragraph (c)(4)(iv)(C)(2) of this section);
    (C) Is signed and dated by the qualified appraiser (within the 
meaning of paragraph (c)(5) of this section) who prepared the qualified 
appraisal (within the meaning of paragraph (c)(3) of this section); and
    (D) Includes the information required by paragraph (c)(4)(ii) of 
this section.
    (ii) Information included in an appraisal summary. An appraisal 
summary shall include the following information:
    (A) The name and taxpayer identification number of the donor (social 
security number if the donor is an individual or employer identification 
number if the donor is a partnership or corporation);
    (B) A description of the property in sufficient detail for a person 
who is not generally familiar with the type of property to ascertain 
that the property that was appraised is the property that was 
contributed;
    (C) In the case of tangible property, a brief summary of the overall 
physical condition of the property at the time of the contribution;
    (D) The manner of acquisition (e.g., purchase, exchange, gift, or 
bequest) and the date of acquisition of the property by the donor, or, 
if the property was created, produced, or manufactured by or for the 
donor, a statment to that effect and the approximate date the property 
was substantially completed;
    (E) The cost or other basis of the property adjusted as provided by 
section 1016;
    (F) The name, address, and taxpayer identification number of the 
donee;
    (G) The date the donee received the property;
    (H) For charitable contributions made after June 6, 1988, a 
statement explaining whether or not the charitable contribution was made 
by means of a bargain sale and the amount of any consideration received 
from the donee for the contribution;
    (I) The name, address, and (if a taxpayer identification number is 
otherwise required by section 6109 and the regulations thereunder) the 
identifying number of the qualified appraiser who signs the appraisal 
summary and of other persons as required by paragraph (c)(3)(ii)(E) of 
this section;
    (J) The appraised fair market value of the property on the date of 
contribution;
    (K) The declaration by the appraiser described in paragraph 
(c)(5)(i) of this section;
    (L) A declaration by the appraiser stating that--
    (1) The fee charged for the appraisal is not of a type prohibited by 
paragraph (c)(6) of this section; and
    (2) Appraisals prepared by the appraiser are not being disregarded 
pursuant to 31 U.S.C. 330(c) on the date the appraisal summary is signed 
by the appraiser; and
    (M) Such other information as may be specified by the form.
    (iii) Signature of the original donee. The person who signs the 
appraisal summary for the donee shall be an official authorized to sign 
the tax or information returns of the donee, or a person specifically 
authorized to sign appraisal summaries by an official authorized to sign 
the tax or information returns of such done. In the case of a donee that 
is a governmental unit, the person who signs the appraisal summary for 
such donee shall be the official authorized by such donee to sign 
appraisal summaries. The signature of the donee on the appraisal summary 
does not represent concurrence in the appraised value of the contributed 
property. Rather, it represents acknowledgment of receipt of the 
property described in the appraisal summary on the date specified in the 
appraisal summary and that the donee understands the information 
reporting requirements imposed by section 6050L

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and Sec.  1.6050L-1. In general, Sec.  1.6050L-1 requires the donee to 
file an information return with the Internal Revenue Service in the 
event the donee sells, exchanges, consumes, or otherwise disposes of the 
property (or any portion thereof) described in the appraisal summary 
within 2 years after the date of the donor's contribution of such 
property.
    (iv) Special rules--(A) Content of appraisal summary required in 
certain cases. With respect to contributions of nonpublicly traded stock 
described in paragraph (c)(2)(ii)(B)(1) of this section, contributions 
of securities described in paragraph (c)(7)(xi)(B) of this section, and 
contributions by C corporations described in paragraph (c)(2)(ii)(B)(3) 
of this section, the term appraisal summary means a document that--
    (1) Complies with the requirements of paragraph (c)(4)(i) (A) and 
(B) of this section,
    (2) Includes the information required by paragraph (c)(4)(ii) (A) 
through (H) of this section,
    (3) Includes the amount claimed or reported as a charitable 
contribution deduction, and
    (4) In the case of securities described in paragraph (c)(7)(xi)(B) 
of this section, also includes the pertinent average trading price (as 
described in paragraph (c)(7)(xi)(B)(2)(iii) of this section).
    (B) Number of appraisal summaries. A separate appraisal summary for 
each item of property described in paragraph (c)(1) of this section must 
be attached to the donor's return. If, during the donor's taxable year, 
the donor contributes similar items of property described in paragraph 
(c)(1) of this section to more than one donee, the donor shall attach to 
the donor's return a separate appraisal summary for each donee. See 
paragraph (c)(7)(iii) of this section for the definition of similar 
items of property. If, however, during the donor's taxable year, a donor 
contributes similar items of property described in paragraph (c)(1) of 
this section to the same donee, the donor may attach to the donor's 
return a single appraisal summary with respect to all similar items of 
property contributed to the same donee. Such an appraisal summary shall 
provide all the information required by paragraph (c)(4)(ii) of this 
section for each item of property, except that the appraiser may select 
any items whose aggregate value is appraised at $100 or less and provide 
a group description for such items.
    (C) Manner of acquisition, cost basis and donee's signature. (1) If 
a taxpayer has reasonable cause for being unable to provide the 
information required by paragraph (c)(4)(ii) (D) and (E) of this section 
(relating to the manner of acquisition and basis of the contributed 
property), an appropriate explanation should be attached to the 
appraisal summary. The taxpayer's deduction will not be disallowed 
simply because of the inability (for reasonable cause) to provide these 
items of information.
    (2) In rare and unusual circumstances in which it is impossible for 
the taxpayer to obtain the signature of the donee on the appraisal 
summary as required by paragraph (c)(4)(i)(B) of this section, the 
taxpayer's deduction will not be disallowed for that reason provided 
that the taxpayer attaches a statement to the appraisal summary 
explaining, in detail, why it was not possible to obtain the donee's 
signature. For example, if the donee ceases to exist as an entity 
subsequent to the date of the contribution and prior to the date when 
the appraisal summary must be signed, and the donor acted reasonably in 
not obtaining the donee's signature at the time of the contribution, 
relief under this paragraph (c)(4)(iv)(C)(2) would generally be 
appropriate.
    (D) Information excluded from certain appraisal summaries. The 
information required by paragraph (c)(4)(i)(C), paragraph (c)(4)(ii) 
(D), (E), (H) through (M), and paragraph (c)(4)(iv)(A)(3), and the 
average trading price referred to in paragraph (c)(4)(iv)(A)(4) of this 
section do not have to be included on the appraisal summary at the time 
it is signed by the donee or a copy is provided to the donee pursuant to 
paragraph (c)(4)(iv)(E) of this section.
    (E) Statement to be furnished by donors to donees. Every donor who 
presents an appraisal summary to a donee for signature after June 6, 
1988, in order to comply with paragraph (c)(4)(i)(B) of

[[Page 140]]

this section shall furnish a copy of the appraisal summary to such 
donee.
    (F) Appraisal summary required to be provided to partners and S 
corporation shareholders. If the donor is a partnership or S 
corporation, the donor shall provide a copy of the appraisal summary to 
every partner or shareholder, respectively, who receives an allocation 
of a charitable contribution deduction under section 170 with respect to 
the property described in the appraisal summary.
    (G) Partners and S corporation shareholders. A partner of a 
partnership or shareholder of an S corporation who receives an 
allocation of a deduction under section 170 for a charitable 
contribution of property to which this paragraph (c) applies must attach 
a copy of the partnership's or S corporation's appraisal summary to the 
tax return on which the deduction for the contribution is first claimed. 
If such appraisal summary is not attached, the partner's or 
shareholder's deduction shall not be allowed except as provided for in 
paragraph (c)(4)(iv)(H) of this section.
    (H) Failure to attach appraisal summary. In the event that a donor 
fails to attach to the donor's return an appraisal summary as required 
by paragraph (c)(2)(i)(B) of this section, the Internal Revenue Service 
may request that the donor submit the appraisal summary within 90 days 
of the request. If such a request is made and the donor complies with 
the request within the 90-day period, the deduction under section 170 
shall not be disallowed for failure to attach the appraisal summary, 
provided that the donor's failure to attach the appraisal summary was a 
good faith omission and the requirements of paragraph (c) (3) and (4) of 
this section are met (including the completion of the qualified 
appraisal prior to the date specified in paragraph (c)(3)(iv)(B) of this 
section).
    (5) Qualified appraiser--(i) In general. The term qualified 
appraiser means an individual (other than a person described in 
paragraph (c)(5)(iv) of this section) who includes on the appraisal 
summary (described in paragraph (c)(4) of this section), a declaration 
that--
    (A) The individual either holds himself or herself out to the public 
as an appraiser or performs appraisals on a regular basis;
    (B) Because of the appraiser's qualifications as described in the 
appraisal (pursuant to paragraph (c)(3)(ii)(F) of this section), the 
appraiser is qualified to make appraisals of the type of property being 
valued;
    (C) The appraiser is not one of the persons described in paragraph 
(c)(5)(iv) of this section; and
    (D) The appraiser understands that an intentionally false or 
fraudulent overstatement of the value of the property described in the 
qualified appraisal or appraisal summary may subject the appraiser to a 
civil penalty under section 6701 for aiding and abetting an 
understatement of tax liability, and, moreover, the appraiser may have 
appraisals disregarded pursuant to 31 U.S.C. 330(c) (see paragraph 
(c)(3)(iii) of this section).
    (ii) Exception. An individual is not a qualified appraiser with 
respect to a particular donation, even if the declaration specified in 
paragraph (c)(5)(i) of this section is provided in the appraisal 
summary, if the donor had knowledge of facts that would cause a 
reasonable person to expect the appraiser falsely to overstate the value 
of the donated property (e.g., the donor and the appraiser make an 
agreement concerning the amount at which the property will be valued and 
the donor knows that such amount exceeds the fair market value of the 
property).
    (iii) Numbers of appraisers. More than one appraiser may appraise 
the donated property. If more than one appraiser appraises the property, 
the donor does not have to use each appraiser's appraisal for purposes 
of substantiating the charitable contribution deduction pursuant to this 
paragraph (c). If the donor uses the appraisal of more than one 
appraiser, or if two or more appraisers contribute to a single 
appraisal, each appraiser shall comply with the requirements of this 
paragraph (c), including signing the qualified appraisal and appraisal 
summary as required by paragraphs (c)(3)(i)(B) and (c)(4)(i)(C) of this 
section, respectively.
    (iv) Qualified appraiser exclusions. The following persons cannot be 
qualified

[[Page 141]]

appraisers with respect to particular property:
    (A) The donor or the taxpayer who claims or reports a deductions 
under section 170 for the contribution of the property that is being 
appraised.
    (B) A party to the transaction in which the donor acquired the 
property being appraised (i.e., the person who sold, exchanged, or gave 
the property to the donor, or any person who acted as an agent for the 
transferor or for the donor with respect to such sale, exchange, or 
gift), unless the property is donated within 2 months of the date of 
acquisition and its appraised value does not exceed its acquisition 
price.
    (C) The donee of the property.
    (D) Any person employed by any of the foregoing persons (e.g., if 
the donor acquired a painting from an art dealer, neither the art dealer 
nor persons employed by the dealer can be qualified appraisers with 
respect to that painting).
    (E) Any person related to any of the foregoing persons under section 
267(b), or, with respect to appraisals made after June 6, 1988, married 
to a person who is in a relationship described in section 267(b) with 
any of the foregoing persons.
    (F) An appraiser who is regularly used by any person described in 
paragraph (c)(5)(iv) (A), (B), or (C) of this section and who does not 
perform a majority of his or her appraisals made during his or her 
taxable year for other persons.
    (6) Appraisal fees--(i) In general. Except as otherwise provided in 
paragraph (c)(6)(ii) of this section, no part of the fee arrangement for 
a qualified appraisal can be based, in effect, on a percentage (or set 
of percentages) of the appraised value of the property. If a fee 
arrangement for an appraisal is based in whole or in part on the amount 
of the appraised value of the property, if any, that is allowed as a 
deduction under section 170, after Internal Revenue Service examination 
or otherwise, it shall be treated as a fee based on a percentage of the 
appraised value of the property. For example, an appraiser's fee that is 
subject to reduction by the same percentage as the appraised value may 
be reduced by the Internal Revenue Service would be treated as a fee 
that violates this paragraph (c)(6).
    (ii) Exception. Paragraph (c)(6)(i) of this section does not apply 
to a fee paid to a generally recognized association that regulates 
appraisers provided all of the following requirements are met:
    (A) The association is not organized for profit and no part of the 
net earnings of the association inures to the benefit of any private 
shareholder or individual (these terms have the same meaning as in 
section 501(c)),
    (B) The appraiser does not receive any compensation from the 
association or any other persons for making the appraisal, and
    (C) The fee arrangement is not based in whole or in part on the 
amount of the appraised value of the donated property, if any, that is 
allowed as a deduction under section 170 after Internal Revenue Service 
examination or otherwise.
    (7) Meaning of terms. For purposes of this paragraph (c)--
    (i) Closely held corporation. The term closely held corporation 
means any corporation (other than an S corporation) with respect to 
which the stock ownership requirement of paragraph (2) of section 542(a) 
of the Code is met.
    (ii) Personal service corporation. The term personal service 
corporation means any corporation (other than an S corporation) which is 
a service organization (within the meaning of section 414(m)(3) of the 
Code).
    (iii) Similar items of property. The phrase similar items of 
property means property of the same generic category or type, such as 
stamp collections (including philatelic supplies and books on stamp 
collecting), coin collections (including numismatic supplies and books 
on coin collecting), lithographs, paintings, photographs, books, 
nonpublicly traded stock, nonpublicly traded securities other than 
nonpublicly trade stock, land, buildings, clothing, jewelry, funiture, 
electronic equipment, household appliances, toys, everyday kitchenware, 
china, crystal, or silver. For example, if a donor claims on her return 
for the year deductions of $2,000 for books given by her to College A, 
$2,500 for books given by her to College B, and $900 for books given by 
her to

[[Page 142]]

College C, the $5,000 threshold of paragraph (c)(1) of this section is 
exceeded. Therefore, the donor must obtain a qualified appraisal for the 
books and attach to her return three appraisal summaries for the books 
donated to A, B, and C. For rules regarding the number of qualified 
appraisals and appraisal summaries required when similar items of 
property are contributed, see paragraphs (c)(3)(iv)(A) and 
(c)(4)(iv)(B), respectively, of this section.
    (iv) Donor. The term donor means a person or entity (other than an 
organization described in section 170(c) to which the donated property 
was previously contributed) that makes a charitable contribution of 
property.
    (v) Donee. The term donee means--
    (A) Except as provided in paragraph (c)(7)(v) (B) and (C) of this 
section, an organization described in section 170(c) to which property 
is contributed,
    (B) Except as provided in paragraph (c)(7)(v)(C) of this section, in 
the case of a charitable contribution of property placed in trust for 
the benefit of an organization described in section 170(c), the trust, 
or
    (C) In the case of a charitable contribution of property placed in 
trust for the benefit of an organization described in section 170(c) 
made on or before June 6, 1988, the beneficiary that is an organization 
described in section 170(c), or if the trust has assumed the duties of a 
donee by signing the appraisal summary pursuant to paragraph 
(c)(4)(i)(B) of this section, the trust.

In general, the term, refers only to the original donee. However, with 
respect to paragraph (c)(3)(ii)(D), the last sentence of paragraph 
(c)(4)(iii), and paragraph (c)(5)(iv)(C) of this section, the term donee 
means the original donee and all successor donees in cases where the 
original donee transfers the contributed property to a successor donee 
after July 5, 1988.
    (vi) Original donee. The term original donee means the donee to or 
for which property is initially donated by a donor.
    (vii) Successor donee. The term successor donee means any donee of 
property other than its original donee (i.e., a transferee of property 
for less than fair market value from an original donee or another 
successor donee).
    (viii) Fair market value. For the meaning of the term fair market 
value, see section 1.170A-1(c)(2).
    (ix) Nonpublicly traded securities. The term nonpublicly traded 
securities means securities (within the meaning of section 165(g)(2) of 
the Code) which are not publicly traded securities as defined in 
paragraph (c)(7)(xi) of this section.
    (x) Nonpublicly traded stock. The term nonpublicly traded stock 
means any stock of a corporation (evidence by a stock certificate) which 
is not a publicly traded security. The term stock does not include a 
debenture or any other evidence of indebtedness.
    (xi) Publicly traded securities--(A) In general. Except as provided 
in paragraph (c)(7)(xi)(C) of this section, the term publicly traded 
securities means securities (within the meaning of section 165(g)(2) of 
the Code) for which (as of the date of the contribution) market 
quotations are readily available on an established securities market. 
For purposes of this section, market quotations are readily available on 
an established securities market with respect to a security if:
    (1) The security is listed on the New York Stock Exchange, the 
American Stock Exchange, or any city or regional exchange in which 
quotations are published on a daily basis, including foreign securities 
listed on a recognized foreign, national, or regional exchange in which 
quotations are published on a daily basis;
    (2) The security is regularly traded in the national or regional 
over-the-counter market, for which published quotations are available; 
or
    (3) The security is a share of an open-end investment company 
(commonly known as a mutual fund) registered under the Investment 
Company Act of 1940, as amended (15 U.S.C. 80a-1 to 80b-2), for which 
quotations are published on a daily basis in a newspaper of general 
circulation throughout the United States.

(If the market value of an issue of a security is reflected only on an 
interdealer quotation system, the issue shall not be considered to be 
publicly traded unless the special rule described

[[Page 143]]

in paragraph (c)(7)(xi)(B) of this section is satisfied.)
    (B) Special rule--(1) In General. An issue of a security that does 
not satisfy the requirements of paragraph (c)(7)(xi)(A) (1), (2), or (3) 
of this section shall nonetheless be considered to have market 
quotations readily available on an established securities market for 
purposes of paragraph (c)(7)(xi)(A) of this section if all of the 
following five requirements are met:
    (i) The issue is regularly traded during the computational period 
(as defined in paragraph (c)(7)(xi)(B)(2)(iv) of this section) in a 
market that is reflected by the existence of an interdealer quotation 
system for the issue,
    (ii) The issuer or an agent of the issuer computes the average 
trading price (as defined in paragraph (c)(7)(xi)(B)(2)(iii) of this 
section) for the issue for the computational period,
    (iii) The average trading price and total volume of the issue during 
the computational period are published in a newspaper of general 
circulation throughout the United States not later than the last day of 
the month following the end of the calendar quarter in which the 
computational period ends,
    (iv) The issuer or its agent keeps books and records that list for 
each transaction during the computational period involving each issue 
covered by this procedure the date of the settlement of the transaction, 
the name and address of the broker or dealer making the market in which 
the transaction occurred, and the trading price and volume, and
    (v) The issuer or its agent permits the Internal Revenue Service to 
review the books and records described in paragraph (c)(7)(xi)(B)(1)(iv) 
of this section with respect to transactions during the computational 
period upon giving reasonable notice to the issuer or agent.
    (2) Definitions. For purposes of this paragraph (c)(7)(xi)(B)--
    (i) Issue of a security. The term issue of a security means a class 
of debt securities with the same obligor and identical terms except as 
to their relative denominations (amounts) or a class of stock having 
identical rights.
    (ii) Interdealer quotation system. The term interdealer quotation 
system means any system of general circulation to brokers and dealers 
that regularly disseminates quotations of obligations by two or more 
identified brokers or dealers, who are not related to either the issuer 
of the security or to the issuer's agent, who compute the average 
trading price of the security. A quotation sheet prepared and 
distributed by a broker or dealer in the regular course of its business 
and containing only quotations of such broker or dealer is not an 
interdealer quotation system.
    (iii) Average trading price. The term average trading price means 
the mean price of all transactions (weighted by volume), other than 
original issue or redemption transactions, conducted through a United 
States office of a broker or dealer who maintains a market in the issue 
of the security during the computational period. For this purpose, bid 
and asked quotations are not taken into account.
    (iv) Computational period. For calendar quarters beginning on or 
after June 6, 1988, the term computational period means weekly during 
October through December (beginning with the first Monday in October and 
ending with the first Sunday following the last Monday in December) and 
monthly during January through September (beginning January 1). For 
calendar quarters beginning before June 6, 1988, the term computational 
period means weekly during October through December and monthly during 
January through September.
    (C) Exception. Securities described in paragraph (c)(7)(xi) (A) or 
(B) of this section shall not be considered publicly traded securities 
if--
    (1) The securities are subject to any restrictions that materially 
affect the value of the securities to the donor or prevent the 
securities from being freely traded, or
    (2) If the amount claimed or reported as a deduction with respect to 
the contribution of the securities is different than the amount listed 
in the market quotations that are readily available on an established 
securities market pursuant to paragraph (c)(7)(xi) (A) or (B) of this 
section.

[[Page 144]]

    (D) Market quotations and fair market value. The fair market value 
of a publicly traded security, as defined in this paragraph (c)(7)(xi), 
is not necessarily equal to its market quotation, its average trading 
price (as defined in paragraph (c)(7)(xi)(B)(2)(iii) of this section), 
or its face value, if any. See section 1.170A-1(c)(2) for the definition 
of fair market value.
    (d) Charitable contributions; information required in support of 
deductions for taxable years beginning before January 1, 1983--(1) In 
general. This paragraph (d)(1) shall apply to deductions for charitable 
contributions made in taxable years beginning before January 1, 1983. At 
the option of the taxpayer the requirements of this paragraph (d)(1) 
shall also apply to all charitable contributions made on or before 
December 31, 1984 (in lieu of the requirements of paragraphs (a) and (b) 
of this section). In connection with claims for deductions for 
charitable contributions, taxpayers shall state in their income tax 
returns the name of each organization to which a contribution was made 
and the amount and date of the actual payment of each contribution. If a 
contribution is made in property other than money, the taxpayer shall 
state the kind of property contributed, for example, used clothing, 
paintings, or securities, the method utilized in determining the fair 
market value of the property at the time the contribution was made, and 
whether or not the amount of the contribution was reduced under section 
170(e). If a taxpayer makes more than one cash contribution to an 
organization during the taxable year, then in lieu of listing each cash 
contribution and the date of payment the taxpayer may state the total 
cash payments made to such organization during the taxable year. A 
taxpayer who elects under paragraph (d)(2) of Sec.  1.170A-8 to apply 
section 170(e)(1) to his contributions and carryovers of 30-percent 
capital gain property must file a statement with his return indicating 
that he has made the election and showing the contributions in the 
current year and carryovers from preceding years to which it applies. 
For the definition of the term 30-percent capital gain property, see 
paragraph (d)(3) of Sec.  1.170A-8.
    (2) Contribution by individual of property other than money. This 
paragraph (d)(2) shall apply to deductions for charitable contributions 
made in taxable years beginning before January 1, 1983. At the option of 
the taxpayer, the requirements of this paragraph (d)(2) shall also apply 
to contributions of property made on or before December 31, 1984 (in 
lieu of the requirements of paragraph (b) of this section). If an 
individual taxpayer makes a charitable contribution of an item of 
property other than money and claims a deduction in excess of $200 in 
respect of his contribution of such item, he shall attach to his income 
tax return the following information with respect to such item:
    (i) The name and address of the organization to which the 
contribution was made.
    (ii) The date of the actual contribution.
    (iii) A description of the property in sufficient detail to identify 
the particular property contributed, including in the case of tangible 
property the physical condition of the property at the time of 
contribution, and, in the case of securities, the name of the issuer, 
the type of security, and whether or not such security is regularly 
traded on a stock exchange or in an over-the-counter market.
    (iv) The manner of acquisition, as, for example, by purchase, gift, 
bequest, inheritance, or exchange, and the approximate date of 
acquisition of the property by the taxpayer or, if the property was 
created, produced, or manufactured by or for the taxpayer, the 
approximate date the property was substantially completed.
    (v) The fair market value of the property at the time the 
contribution was made, the method utilized in determining the fair 
market value, and, if the valuation was determined by appraisal, a copy 
of the signed report of the appraiser.
    (vi) The cost or other basis, adjusted as provided by section 1016, 
of property, other than securities, held by the taxpayer for a period of 
less than 5 years immediately preceding the date on which the 
contribution was made and, when the information is available, of 
property, other than securities, held

[[Page 145]]

for a period of 5 years or more preceding the date on which the 
contribution was made.
    (vii) In the case of property to which section 170(e) applies, the 
cost or other basis, adjusted as provided by section 1016, the reduction 
by reason of section 170(e)(1) in the amount of the charitable 
contribution otherwise taken into account, and the manner in which such 
reduction was determined.
    (viii) The terms of any agreement or understanding entered into by 
or on behalf of the taxpayer which relates to the use, sale, or 
disposition of the property contributed, as, for example, the terms of 
any agreement or understanding which:
    (A) Restricts temporarily or permanently the donee's right to 
dispose of the donated property,
    (B) Reserves to, or confers upon, anyone other than the donee 
organization or other than an organization participating with such 
organization in cooperative fundraising, any right to the income from 
such property, to the possession of the property, including the right to 
vote securities, to acquire such property by purchase or otherwise, or 
to designate the person to have such income, possession, or right to 
acquire, or
    (C) Earmarks contributed property for a particular charitable use, 
such as the use of donated furniture in the reading room of the donee 
organization's library.
    (ix) The total amount claimed as a deduction for the taxable year 
due to the contribution of the property and, if less than the entire 
interest in the property is contributed during the taxable year, the 
amount claimed as a deduction in any prior year or years for 
contributions of other interests in such property, the name and address 
of each organization to which any such contribution was made, the place 
where any such property which is tangible property is located or kept, 
and the name of any person, other than the organization to which the 
property giving rise to the deduction was contributed, having actual 
possession of the property.
    (3) Statement from donee organization. Any deduction for a 
charitable contribution must be substantiated, when required by the 
district director, by a statement from the organization to which the 
contribution was made indicating whether the organization is a domestic 
organization, the name and address of the contributor, the amount of the 
contribution, the date of actual receipt of the contribution, and such 
other information as the district director may deem necessary. If the 
contribution includes an item of property, other than money or 
securities which are regularly traded on a stock exchange or in an over-
the-counter market, which the donee deems to have a fair market value in 
excess of $500 ($200 in the case of a charitable contribution made in a 
taxable year beginning before January 1, 1983) at the time of receipt, 
such statement shall also indicate for each such item its location if it 
is retained by the organization, the amount received by the organization 
on any sale of the property and the date of sale or, in case of any 
other disposition of the property, the method of disposition. In the 
case of any contribution of tangible personal property, the statement 
shall indicate the use of the property by the organization and whether 
or not it is used for a purpose or function constituting the basis for 
the donee organization's exemption from income tax under section 501 or, 
in the case of a governmental unit, whether or not it is used for 
exclusively public purposes.
    (e) [Reserved]
    (f) Substantiation of charitable contributions of $250 or more--(1) 
In general. No deduction is allowed under section 170(a) for all or part 
of any contribution of $250 or more unless the taxpayer substantiates 
the contribution with a contemporaneous written acknowledgment from the 
donee organization. A taxpayer who makes more than one contribution of 
$250 or more to a donee organization in a taxable year may substantiate 
the contributions with one or more contemporaneous written 
acknowledgments. Section 170(f)(8) does not apply to a payment of $250 
or more if the amount contributed (as determined under Sec.  1.170A-
1(h)) is less than $250. Separate contributions of less than $250 are 
not subject to the requirements of section 170(f)(8), regardless of 
whether the sum

[[Page 146]]

of the contributions made by a taxpayer to a donee organization during a 
taxable year equals $250 or more.
    (2) Written acknowledgment. Except as otherwise provided in 
paragraphs (f)(8) through (f)(11) and (f)(13) of this section, a written 
acknowledgment from a donee organization must provide the following 
information--
    (i) The amount of any cash the taxpayer paid and a description (but 
not necessarily the value) of any property other than cash the taxpayer 
transferred to the donee organization;
    (ii) A statement of whether or not the donee organization provides 
any goods or services in consideration, in whole or in part, for any of 
the cash or other property transferred to the donee organization;
    (iii) If the donee organization provides any goods or services other 
than intangible religious benefits (as described in section 170(f)(8)), 
a description and good faith estimate of the value of those goods or 
services; and
    (iv) If the donee organization provides any intangible religious 
benefits, a statement to that effect.
    (3) Contemporaneous. A written acknowledgment is contemporaneous if 
it is obtained by the taxpayer on or before the earlier of--
    (i) The date the taxpayer files the original return for the taxable 
year in which the contribution was made; or
    (ii) The due date (including extensions) for filing the taxpayer's 
original return for that year.
    (4) Donee organization. For purposes of this paragraph (f), a donee 
organization is an organization described in section 170(c).
    (5) Goods or services. Goods or services means cash, property, 
services, benefits, and privileges.
    (6) In consideration for. A donee organization provides goods or 
services in consideration for a taxpayer's payment if, at the time the 
taxpayer makes the payment to the donee organization, the taxpayer 
receives or expects to receive goods or services in exchange for that 
payment. Goods or services a donee organization provides in 
consideration for a payment by a taxpayer include goods or services 
provided in a year other than the year in which the taxpayer makes the 
payment to the donee organization.
    (7) Good faith estimate. For purposes of this section, good faith 
estimate means a donee organization's estimate of the fair market value 
of any goods or services, without regard to the manner in which the 
organization in fact made that estimate. See Sec.  1.170A-1(h)(4) for 
rules regarding when a taxpayer may treat a donee organization's 
estimate of the value of goods or services as the fair market value.
    (8) Certain goods or services disregarded--(i) In general. For 
purposes of section 170(f)(8), the following goods or services are 
disregarded--
    (A) Goods or services that have insubstantial value under the 
guidelines provided in Revenue Procedures 90-12, 1990-1 C.B. 471, 92-49, 
1992-1 C.B. 987, and any successor documents. (See Sec.  
601.601(d)(2)(ii) of the Statement of Procedural Rules, 26 CFR part 
601.); and
    (B) Annual membership benefits offered to a taxpayer in exchange for 
a payment of $75 or less per year that consist of--
    (1) Any rights or privileges, other than those described in section 
170(l), that the taxpayer can exercise frequently during the membership 
period. Examples of such rights and privileges may include, but are not 
limited to, free or discounted admission to the organization's 
facilities or events, free or discounted parking, preferred access to 
goods or services, and discounts on the purchase of goods or services; 
and
    (2) Admission to events during the membership period that are open 
only to members of a donee organization and for which the donee 
organization reasonably projects that the cost per person (excluding any 
allocable overhead) attending each such event is within the limits 
established for ``low cost articles'' under section 513(h)(2). The 
projected cost to the donee organization is determined at the time the 
organization first offers its membership package for the year (using 
section 3.07 of Revenue Procedure 90-12, or any successor documents, to 
determine the cost of any items or services that are donated).

[[Page 147]]

    (ii) Examples. The following examples illustrate the rules of this 
paragraph (f)(8).

    Example 1. Membership benefits disregarded. Performing Arts Center E 
is an organization described in section 170(c). In return for a payment 
of $75, E offers a package of basic membership benefits that includes 
the right to purchase tickets to performances one week before they go on 
sale to the general public, free parking in E's garage during evening 
and weekend performances, and a 10% discount on merchandise sold in E's 
gift shop. In return for a payment of $150, E offers a package of 
preferred membership benefits that includes all of the benefits in the 
$75 package as well as a poster that is sold in E's gift shop for $20. 
The basic membership and the preferred membership are each valid for 
twelve months, and there are approximately 50 performances of various 
productions at E during a twelve-month period. E's gift shop is open for 
several hours each week and at performance times. F, a patron of the 
arts, is solicited by E to make a contribution. E offers F the preferred 
membership benefits in return for a payment of $150 or more. F makes a 
payment of $300 to E. F can satisfy the substantiation requirement of 
section 170(f)(8) by obtaining a contemporaneous written acknowledgment 
from E that includes a description of the poster and a good faith 
estimate of its fair market value ($20) and disregards the remaining 
membership benefits.
    Example 2. Contemporaneous written acknowledgment need not mention 
rights or privileges that can be disregarded. The facts are the same as 
in Example 1, except that F made a payment of $300 and received only a 
basic membership. F can satisfy the section 170(f)(8) substantiation 
requirement with a contemporaneous written acknowledgment stating that 
no goods or services were provided.
    Example 3. Rights or privileges that cannot be exercised frequently. 
Community Theater Group G is an organization described in section 
170(c). Every summer, G performs four different plays. Each play is 
performed two times. In return for a membership fee of $60, G offers its 
members free admission to any of its performances. Non-members may 
purchase tickets on a performance by performance basis for $15 a ticket. 
H, an individual who is a sponsor of the theater, is solicited by G to 
make a contribution. G tells H that the membership benefit will be 
provided in return for any payment of $60 or more. H chooses to make a 
payment of $350 to G and receives in return the membership benefit. G's 
membership benefit of free admission is not described in paragraph 
(f)(8)(i)(B) of this section because it is not a privilege that can be 
exercised frequently (due to the limited number of performances offered 
by G). Therefore, to meet the requirements of section 170(f)(8), a 
contemporaneous written acknowledgment of H's $350 payment must include 
a description of the free admission benefit and a good faith estimate of 
its value.
    Example 4. Multiple memberships. In December of each year, K, an 
individual, gives each of her six grandchildren a junior membership in 
Dinosaur Museum, an organization described in section 170(c). Each 
junior membership costs $50, and K makes a single payment of $300 for 
all six memberships. A junior member is entitled to free admission to 
the museum and to weekly films, slide shows, and lectures about 
dinosaurs. In addition, each junior member receives a bi-monthly, non-
commercial quality newsletter with information about dinosaurs and 
upcoming events. K's contemporaneous written acknowledgment from 
Dinosaur Museum may state that no goods or services were provided in 
exchange for K's payment.

    (9) Goods or services provided to employees or partners of donors--
(i) Certain goods or services disregarded. For purposes of section 
170(f)(8), goods or services provided by a donee organization to 
employees of a donor, or to partners of a partnership that is a donor, 
in return for a payment to the organization may be disregarded to the 
extent that the goods or services provided to each employee or partner 
are the same as those described in paragraph (f)(8)(i) of this section.
    (ii) No good faith estimate required for other goods or services. If 
a taxpayer makes a contribution of $250 or more to a donee organization 
and, in return, the donee organization offers the taxpayer's employees 
or partners goods or services other than those described in paragraph 
(f)(9)(i) of this section, the contemporaneous written acknowledgment of 
the taxpayer's contribution is not required to include a good faith 
estimate of the value of such goods or services but must include a 
description of those goods or services.
    (iii) Example. The following example illustrates the rules of this 
paragraph (f)(9).

    Example. Museum J is an organization described in section 170(c). 
For a payment of $40, J offers a package of basic membership benefits 
that includes free admission and a 10% discount on merchandise sold in 
J's gift shop. J's other membership categories are for supporters who 
contribute $100 or more. Corporation K makes a payment of $50,000 to J 
and, in return, J offers K's employees free admission for one year, a 
tee-shirt with J's logo

[[Page 148]]

that costs J $4.50, and a gift shop discount of 25% for one year. The 
free admission for K's employees is the same as the benefit made 
available to holders of the $40 membership and is otherwise described in 
paragraph (f)(8)(i)(B) of this section. The tee-shirt given to each of 
K's employees is described in paragraph (f)(8)(i)(A) of this section. 
Therefore, the contemporaneous written acknowledgment of K's payment is 
not required to include a description or good faith estimate of the 
value of the free admission or the tee-shirts. However, because the gift 
shop discount offered to K's employees is different than that offered to 
those who purchase the $40 membership, the discount is not described in 
paragraph (f)(8)(i) of this section. Therefore, the contemporaneous 
written acknowledgment of K's payment is required to include a 
description of the 25% discount offered to K's employees.

    (10) Substantiation of out-of-pocket expenses. A taxpayer who incurs 
unreimbursed expenditures incident to the rendition of services, within 
the meaning of Sec.  1.170A-1(g), is treated as having obtained a 
contemporaneous written acknowledgment of those expenditures if the 
taxpayer--
    (i) Has adequate records under paragraph (a) of this section to 
substantiate the amount of the expenditures; and
    (ii) Obtains by the date prescribed in paragraph (f)(3) of this 
section a statement prepared by the donee organization containing--
    (A) A description of the services provided by the taxpayer;
    (B) A statement of whether or not the donee organization provides 
any goods or services in consideration, in whole or in part, for the 
unreimbursed expenditures; and
    (C) The information required by paragraphs (f)(2) (iii) and (iv) of 
this section.
    (11) Contributions made by payroll deduction--(i) Form of 
substantiation. A contribution made by means of withholding from a 
taxpayer's wages and payment by the taxpayer's employer to a donee 
organization may be substantiated, for purposes of section 170(f)(8), by 
both--
    (A) A pay stub, Form W-2, or other document furnished by the 
employer that sets forth the amount withheld by the employer for the 
purpose of payment to a donee organization; and
    (B) A pledge card or other document prepared by or at the direction 
of the donee organization that includes a statement to the effect that 
the organization does not provide goods or services in whole or partial 
consideration for any contributions made to the organization by payroll 
deduction.
    (ii) Application of $250 threshold. For the purpose of applying the 
$250 threshold provided in section 170(f)(8)(A) to contributions made by 
the means described in paragraph (f)(11)(i) of this section, the amount 
withheld from each payment of wages to a taxpayer is treated as a 
separate contribution.
    (12) Distributing organizations as donees. An organization described 
in section 170(c), or an organization described in 5 CFR 950.105 (a 
Principal Combined Fund Organization for purposes of the Combined 
Federal Campaign) and acting in that capacity, that receives a payment 
made as a contribution is treated as a donee organization solely for 
purposes of section 170(f)(8), even if the organization (pursuant to the 
donor's instructions or otherwise) distributes the amount received to 
one or more organizations described in section 170(c). This paragraph 
(f)(12) does not apply, however, to a case in which the distributee 
organization provides goods or services as part of a transaction 
structured with a view to avoid taking the goods or services into 
account in determining the amount of the deduction to which the donor is 
entitled under section 170.
    (13) Transfers to certain trusts. Section 170(f)(8) does not apply 
to a transfer of property to a trust described in section 170(f)(2)(B), 
a charitable remainder annuity trust (as defined in section 664(d)(1)), 
or a charitable remainder unitrust (as defined in section 664(d)(2) or 
(d)(3) or Sec.  1.664(3)(a)(1)(i)(b)). Section 170(f)(8) does apply, 
however, to a transfer to a pooled income fund (as defined in section 
642(c)(5)); for such a transfer, the contemporaneous written 
acknowledgment must state that the contribution was transferred to the 
donee organization's pooled income fund and indicate whether any goods 
or services (in addition to an income interest in the fund) were 
provided in exchange for the transfer. The contemporaneous written 
acknowledgment is

[[Page 149]]

not required to include a good faith estimate of the income interest.
    (14) Substantiation of payments to a college or university for the 
right to purchase tickets to athletic events. For purposes of paragraph 
(f)(2)(iii) of this section, the right to purchase tickets for seating 
at an athletic event in exchange for a payment described in section 
170(l) is treated as having a value equal to twenty percent of such 
payment. For example, when a taxpayer makes a payment of $312.50 for the 
right to purchase tickets for seating at an athletic event, the right to 
purchase tickets is treated as having a value of $62.50. The remaining 
$250 is treated as a charitable contribution, which the taxpayer must 
substantiate in accordance with the requirements of this section.
    (15) Substantiation of charitable contributions made by a 
partnership or an S corporation. If a partnership or an S corporation 
makes a charitable contribution of $250 or more, the partnership or S 
corporation will be treated as the taxpayer for purposes of section 
170(f)(8). Therefore, the partnership or S corporation must substantiate 
the contribution with a contemporaneous written acknowledgment from the 
donee organization before reporting the contribution on its income tax 
return for the year in which the contribution was made and must maintain 
the contemporaneous written acknowledgment in its records. A partner of 
a partnership or a shareholder of an S corporation is not required to 
obtain any additional substantiation for his or her share of the 
partnership's or S corporation's charitable contribution.
    (16) Purchase of an annuity. If a taxpayer purchases an annuity from 
a charitable organization and claims a charitable contribution deduction 
of $250 or more for the excess of the amount paid over the value of the 
annuity, the contemporaneous written acknowledgment must state whether 
any goods or services in addition to the annuity were provided to the 
taxpayer. The contemporaneous written acknowledgment is not required to 
include a good faith estimate of the value of the annuity. See Sec.  
1.170A-1(d)(2) for guidance in determining the value of the annuity.
    (17) Substantiation of matched payments--(i) In general. For 
purposes of section 170, if a taxpayer's payment to a donee organization 
is matched, in whole or in part, by another payor, and the taxpayer 
receives goods or services in consideration for its payment and some or 
all of the matching payment, those goods or services will be treated as 
provided in consideration for the taxpayer's payment and not in 
consideration for the matching payment.
    (ii) Example. The following example illustrates the rules of this 
paragraph (f)(17).

    Example. Taxpayer makes a $400 payment to Charity L, a donee 
organization. Pursuant to a matching payment plan, Taxpayer's employer 
matches Taxpayer's $400 payment with an additional payment of $400. In 
consideration for the combined payments of $800, L gives Taxpayer an 
item that it estimates has a fair market value of $100. L does not give 
the employer any goods or services in consideration for its 
contribution. The contemporaneous written acknowledgment provided to the 
employer must include a statement that no goods or services were 
provided in consideration for the employer's $400 payment. The 
contemporaneous written acknowledgment provided to Taxpayer must include 
a statement of the amount of Taxpayer's payment, a description of the 
item received by Taxpayer, and a statement that L's good faith estimate 
of the value of the item received by Taxpayer is $100.

    (18) Effective date. This paragraph (f) applies to contributions 
made on or after December 16, 1996. However, taxpayers may rely on the 
rules of this paragraph (f) for contributions made on or after January 
1, 1994.

[T.D. 8002, 49 FR 50664 and 50666, Dec. 31, 1984, as amended by T.D. 
8003, 49 FR 50659, Dec. 31, 1984; T.D. 8199, 53 FR 16080, May 5, 1988; 
53 FR 18372, May 23, 1988; T.D. 8623, 60 FR 53128, Oct. 12, 1995; T.D. 
8690, 61 FR 65952, Dec. 16, 1996]