Internal Revenue Code:Sec. 2522. Charitable and similar gifts
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 12 - GIFT TAX
Subchapter C - Deductions
Statute
Sec. 2522. Charitable and similar gifts
(a) Citizens or residents
In computing taxable gifts for the calendar year, there shall be
allowed as a deduction in the case of a citizen or resident the
amount of all gifts made during such year to or for the use of -
(1) the United States, any State, or any political subdivision
thereof, or the District of Columbia, for exclusively public
purposes;
(2) a corporation, or trust, or community chest, fund, or
foundation, organized and operated exclusively for religious,
charitable, scientific, literary, or educational purposes, or to
foster national or international amateur sports competition (but
only if no part of its activities involve the provision of
athletic facilities or equipment), including the encouragement of
art and the prevention of cruelty to children or animals, no part
of the net earnings of which inures to the benefit of any private
shareholder or individual, which is not disqualified for tax
exemption under section 501(c)(3) by reason of attempting to
influence legislation, and which does not participate in, or
intervene in (including the publishing or distributing of
statements), any political campaign on behalf of (or in
opposition to) any candidate for public office;
(3) a fraternal society, order, or association, operating under
the lodge system, but only if such gifts are to be used
exclusively for religious, charitable, scientific, literary, or
educational purposes, including the encouragement of art and the
prevention of cruelty to children or animals;
(4) posts or organizations of war veterans, or auxiliary units
or societies of any such posts or organizations, if such posts,
organizations, units, or societies are organized in the United
States or any of its possessions, and if no part of their net
earnings insures to the benefit of any private shareholder or
individual.
Rules similar to the rules of section 501(j) shall apply for
purposes of paragraph (2).
(b) Nonresidents
In the case of a nonresident not a citizen of the United States,
there shall be allowed as a deduction the amount of all gifts made
during such year to or for the use of -
(1) the United States, any State, or any political subdivision
thereof, or the District of Columbia, for exclusively public
purposes;
(2) a domestic corporation organized and operated exclusively
for religious, charitable, scientific, literary, or educational
purposes, including the encouragement of art and the prevention
of cruelty to children or animals, no part of the net earnings of
which inures to the benefit of any private shareholder or
individual, which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation, and which does not participate in, or intervene in
(including the publishing or distributing of statements), any
political campaign on behalf of (or in opposition to) any
candidate for public office;
(3) a trust, or community chest, fund, or foundation, organized
and operated exclusively for religious, charitable, scientific,
literary, or educational purposes, including the encouragement of
art and the prevention of cruelty to children or animals, no
substantial part of the activities of which is carrying on
propaganda, or otherwise attempting, to influence legislation,
and which does not participate in, or intervene in (including the
publishing or distributing of statements), any political campaign
on behalf of (or in opposition to) any candidate for public
office; but only if such gifts are to be used within the United
States exclusively for such purposes;
(4) a fraternal society, order, or association, operating under
the lodge system, but only if such gifts are to be used within
the United States exclusively for religious, charitable,
scientific, literary, or educational purposes, including the
encouragement of art and the prevention of cruelty to children or
animals;
(5) posts or organizations of war veterans, or auxiliary units
or societies of any such posts or organizations, if such posts,
organizations, units, or societies are organized in the United
States or any of its possessions, and if no part of their net
earnings inures to the benefit of any private shareholder or
individual.
(c) Disallowance of deductions in certain cases
(1) No deduction shall be allowed under this section for a gift
to of (FOOTNOTE 1) for the use of an organization or trust
described in section 508(d) or 4948(c)(4) subject to the conditions
specified in such sections.
(FOOTNOTE 1) So in original. Probably should be ''or''.
(2) Where a donor transfers an interest in property (other than
an interest described in section 170(f)(3)(B)) to a person, or for
a use, described in subsection (a) or (b) and an interest in the
same property is retained by the donor, or is transferred or has
been transferred (for less than an adequate and full consideration
in money or money's worth) from the donor to a person, or for a
use, not described in subsection (a) or (b), no deduction shall be
allowed under this section for the interest which is, or has been
transferred to the person, or for the use, described in subsection
(a) or (b), unless -
(A) in the case of a remainder interest, such interest is in a
trust which is a charitable remainder annuity trust or a
charitable remainder unitrust (described in section 664) or a
pooled income fund (described in section 642(c)(5)), or
(B) in the case of any other interest, such interest is in the
form of a guaranteed annuity or is a fixed percentage distributed
yearly of the fair market value of the property (to be determined
yearly).
(3) Rules similar to the rules of section 2055(e)(4) shall apply
for purposes of paragraph (2).
(4) Reformations to comply with paragraph (2)
(A) In general
A deduction shall be allowed under subsection (a) in respect
of any qualified reformation (within the meaning of section
2055(e)(3)(B)).
(B) Rules similar to section 2055(e)(3) to apply
For purposes of this paragraph, rules similar to the rules of
section 2055(e)(3) shall apply.
(5) Contributions to donor advised funds.--A deduction
otherwise allowed under subsection (a) for any contribution to a
donor advised fund (as defined in section 4966(d)(2)) shall only
be allowed if--
(A) the sponsoring organization (as defined in
section 4966(d)(1)) with respect to such donor advised
fund is not--
(i) described in paragraph (3) or (4) of
subsection (a), or
(ii) a type III supporting organization (as
defined in section 4943(f)(5)(A)) which is not a
functionally integrated type III supporting
organization (as defined in section
4943(f)(5)(B)), and
(B) the taxpayer obtains a contemporaneous written
acknowledgment (determined under rules similar to the
rules of section 170(f)(8)(C)) from the sponsoring
organization (as so defined) of such donor advised fund
that such organization has exclusive legal control over
the assets contributed.
(d) Special rule for irrevocable transfers of easements in real
property
A deduction shall be allowed under subsection (a) in respect of
any transfer of a qualified real property interest (as defined in
section 170(h)(2)(C)) which meets the requirements of section
170(h) (without regard to paragraph (4)(A) thereof).
(e) Special Rules for Fractional Gifts.--
(1) Denial of deduction in certain cases.--
(A) In general.--No deduction shall be allowed for
a contribution of an undivided portion of a taxpayer's
entire interest in tangible personal property unless all
interest in the property is held immediately before such
contribution by--
(i) the taxpayer, or
(ii) the taxpayer and the donee.
(B) Exceptions.--The Secretary may, by regulation,
provide for exceptions to subparagraph (A) in cases
where all persons who hold an interest in the property
make proportional contributions of an undivided portion
of the entire interest held by such persons.
(2) Recapture of deduction in certain cases; addition to
tax.--
(A) In general.--The Secretary shall provide for
the recapture of an amount equal to any deduction
allowed under this section (plus interest) with respect
to any contribution of an undivided portion of a
taxpayer's entire interest in tangible personal
property--
(i) in any case in which the donor does not
contribute all of the remaining interest in such
property to the donee (or, if such donee is no
longer in existence, to any person described in
section 170(c)) before the earlier of--
(I) the date that is 10 years
after the date of the initial fractional
contribution, or
(II) the date of the death of the
donor, and
(ii) in any case in which the donee has not,
during the period beginning on the date of the
initial fractional contribution and ending on the
date described in clause (i)--
(I) had substantial physical
possession of the property, and
(II) used the property in a use
which is related to a purpose or
function constituting the basis for the
organizations' exemption under section
501.
(B) Addition to tax.--The tax imposed under this
chapter for any taxable year for which there is a
recapture under subparagraph (A) shall be increased by
10 percent of the amount so recaptured.
(C) Initial fractional contribution.--For purposes
of this paragraph, the term `initial fractional
contribution' means, with respect to any donor, the
first gift of an undivided portion of the donor's entire
interest in any tangible personal property for which a
deduction is allowed under subsection (a) or (b).
(f) Cross references
(1) For treatment of certain organizations providing child
care, see section 501(k).
(2) For exemption of certain gifts to or for the benefit of
the United States and for rules of construction with respect to
certain bequests, see section 2055(f).
(3) For treatment of gifts to or for the use of Indian tribal
governments (or their subdivisions), see section 7871.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 410; Pub. L. 85-866, title I,
Sec. 30(d), Sept. 2, 1958, 72 Stat. 1631; Pub. L. 91-172, title II,
Sec. 201(d)(3), (4)(C), (D), Dec. 30, 1969, 83 Stat. 561, 562; Pub.
L. 91-614, title I, Sec. 102(c)(2), Dec. 31, 1970, 84 Stat. 1841;
Pub. L. 94-455, title XII, Sec. 1307(d)(1)(B)(iv), (v), 1313(b)(3),
title XIX, Sec. 1902(a)(11), (12)(D), title XXI, Sec. 2124(e)(3),
Oct. 4, 1976, 90 Stat. 1727, 1730, 1805, 1806, 1920; Pub. L. 97-34,
title IV, Sec. 423(b), 442(c), Aug. 13, 1981, 95 Stat. 317, 322;
Pub. L. 97-248, title II, Sec. 286(b)(3), Sept. 3, 1982, 96 Stat.
570; Pub. L. 97-473, title II, Sec. 202(b)(7), Jan. 14, 1983, 96
Stat. 2610; Pub. L. 98-369, div. A, title X, Sec. 1022(c),
1032(b)(3), July 18, 1984, 98 Stat. 1028, 1034; Pub. L. 99-514,
title XIV, Sec. 1422(b), Oct. 22, 1986, 100 Stat. 2717; Pub. L.
100-203, title X, Sec. 10711(a)(5), (6), Dec. 22, 1987, 101 Stat.
1330-464.)
Miscellaneous
AMENDMENTS
2007 - PL 110-172
(2) Subsection (e) of section 2522 is amended--
(A) by striking paragraphs (2) and (4),
(B) by redesignating paragraph (3) as paragraph (2),
and
(C) by adding at the end of paragraph (2), as so
redesignated, the following new subparagraph:
``(C) Initial fractional contribution.--For purposes
of this paragraph, the term `initial fractional
contribution' means, with respect to any donor, the
first gift of an undivided portion of the donor's entire
interest in any tangible personal property for which a
deduction is allowed under subsection (a) or (b).''.
2006 - Pension Protection Act of 2006 (P.L. 109-280)
Section 1234(c) Gift.--Section 2522(c) <<NOTE: 26 USC 2522.>> is amended by
adding at the end the following new paragraph:
``(5) Contributions to donor advised funds.--A deduction
otherwise allowed under subsection (a) for any contribution to a
donor advised fund (as defined in section 4966(d)(2)) shall only
be allowed if--
``(A) the sponsoring organization (as defined in
section 4966(d)(1)) with respect to such donor advised
fund is not--
``(i) described in paragraph (3) or (4) of
subsection (a), or
``(ii) a type III supporting organization (as
defined in section 4943(f)(5)(A)) which is not a
functionally integrated type III supporting
organization (as defined in section
4943(f)(5)(B)), and
``(B) the taxpayer obtains a contemporaneous written
acknowledgment (determined under rules similar to the
rules of section 170(f)(8)(C)) from the sponsoring
organization (as so defined) of such donor advised fund
that such organization has exclusive legal control over
the assets contributed.''.
2006 - Pension Protection Act of 2006 (P.L. 109-280)
Section 1218(c) Gift Tax.--Section 2522 <<NOTE: 26 USC 2522.>> (relating to
charitable and similar gifts) is amended by redesignating subsection (e)
as subsection (f) and by inserting after subsection (d) the following
new subsection:
``(e) Special Rules for Fractional Gifts.--
``(1) Denial of deduction in certain cases.--
``(A) In general.--No deduction shall be allowed for
a contribution of an undivided portion of a taxpayer's
entire interest in tangible personal property unless all
interest in the property is held immediately before such
contribution by--
``(i) the taxpayer, or
``(ii) the taxpayer and the donee.
``(B) Exceptions.--The Secretary may, by regulation,
provide for exceptions to subparagraph (A) in cases
where all persons who hold an interest in the property
make proportional contributions of an undivided portion
of the entire interest held by such persons.
``(2) Valuation of subsequent gifts.--In the case of any
additional contribution, the fair market value of such
contribution shall be determined by using the lesser of--
``(A) the fair market value of the property at the
time of the initial fractional contribution, or
``(B) the fair market value of the property at the
time of the additional contribution.
``(3) Recapture of deduction in certain cases; addition to
tax.--
``(A) In general.--The Secretary shall provide for
the recapture of an amount equal to any deduction
allowed under this section (plus interest) with respect
to any contribution of an undivided portion of a
taxpayer's entire interest in tangible personal
property--
``(i) in any case in which the donor does not
contribute all of the remaining interest in such
property to the donee (or, if such donee is no
longer in existence, to any person described in
section 170(c)) before the earlier of--
``(I) the date that is 10 years
after the date of the initial fractional
contribution, or
``(II) the date of the death of the
donor, and
``(ii) in any case in which the donee has not,
during the period beginning on the date of the
initial fractional contribution and ending on the
date described in clause (i)--
``(I) had substantial physical
possession of the property, and
``(II) used the property in a use
which is related to a purpose or
function constituting the basis for the
organizations' exemption under section
501.
``(B) Addition to tax.--The tax imposed under this
chapter for any taxable year for which there is a
recapture under subparagraph (A) shall be increased by
10 percent of the amount so recaptured.
``(4) Definitions.--For purposes of this subsection--
``(A) Additional contribution.--The term `additional
contribution' means any gift for which a deduction is
allowed under subsection (a) or (b) of any interest in a
property with respect to which the donor has previously
made an initial fractional contribution.
``(B) Initial fractional contribution.--The term
`initial fractional contribution' means, with respect to
any donor, the first gift of an undivided portion of the
donor's entire interest in any tangible personal
property for which a deduction is allowed under
subsection (a) or (b).''.
1987 - Subsecs. (a)(2), (b)(2), (3). Pub. L. 100-203 inserted
''(or in opposition to)'' after ''on behalf of''.
1986 - Subsecs. (d), (e). Pub. L. 99-514 added subsec. (d) and
redesignated former subsec. (d) as (e).
1984 - Subsec. (c)(4). Pub. L. 98-369, Sec. 1022(c), added par.
(4).
Subsec. (d). Pub. L. 98-369, Sec. 1032(b)(3), added par. (1) and
redesignated former pars. (1) and (2) as (2) and (3), respectively.
1983 - Subsec. (d). Pub. L. 97-473 designated existing provisions
as par. (1), substituted ''bequests'' for ''gifts'' second time
appearing in par. (1) as so designated, and added par. (2).
1982 - Subsec. (a). Pub. L. 97-248 inserted provision that rules
similar to rules of section 501(j) apply for purposes of par. (2).
1981 - Subsec. (a). Pub. L. 97-34, Sec. 442(c), substituted
''year'' for ''quarter'' in two places in provision preceding par.
(1).
Subsec. (b). Pub. L. 97-34, Sec. 442(c), substituted ''year'' for
''quarter'' in provision preceding par. (1).
Subsec. (c)(3). Pub. L. 97-34, Sec. 423(b), added par. (3).
1976 - Subsec. (a)(1). Pub. L. 94-455, Sec. 1902(a)(12)(D),
struck out ''Territory'' after ''any State''.
Subsec. (a)(2). Pub. L. 94-455, Sec. 1307(d)(1)(B)(iv),
1313(b)(3), substituted ''which is not disqualified for tax
exemption under section 501(c)(3) by reason of attempting to
influence legislation'' for ''no substantial part of the activities
of which is carrying on propaganda, or otherwise attempting, to
influence legislation'' after ''shareholder or individual'' and
inserted ''or to foster national or international amateur sports
competition (but only if no part of its activities involve the
provision of athletic facilities or equipment)'' after ''or
educational purposes''.
Subsec. (b)(1). Pub. L. 94-455, Sec. 1902(a)(12)(D), struck out
''Territory'' after ''any State''.
Subsec. (b)(2). Pub. L. 94-455, Sec. 1307(d)(1)(B)(v),
substituted ''which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation'' for ''no substantial part of the activities of which
is carrying on propaganda, or otherwise attempting, to influence
legislation'' after ''shareholder or individual''.
Subsec. (c)(2). Pub. L. 94-455, Sec. 2124(e)(3), substituted
''(other than an interest described in section 170(f)(3)(B))'' for
''(other than a remainder interest in a personal residence or farm
or an undivided portion of the donor's entire interest in
property)'' after ''an interest in property''.
Subsec. (d). Pub. L. 94-455, Sec. 1902(a)(11), substituted
subsec. (d) for former subsec. (d), pars. (1) through (10), which
dealt with cross references to specific exemptions and rules of
construction for gifts to the United States and its
instrumentalities.
1970 - Pub. L. 91-614 substituted ''quarter'' for ''year'' in
three places.
1969 - Subsecs. (a)(2), (b)(2), (3). Pub. L. 91-172, Sec.
201(d)(4)(C), (D), inserted non-participation and non-intervention
in political campaigns as an additional qualification.
Subsec. (c). Pub. L. 91-172, Sec. 201(d)(3), substituted
substantive provisions for simple reference to sections 503 and 681
in which such substantive provisions were formerly set out.
1958 - Subsec. (c). Pub. L. 85-866 substituted ''503'' for
''504''.
EFFECTIVE DATE OF 1987 AMENDMENT
Amendment by Pub. L. 100-203 applicable with respect to
activities after Dec. 22, 1987, see section 10711(c) of Pub. L.
100-203, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to transfers and
contributions made after Dec. 31, 1986, see section 1422(e) of Pub.
L. 99-514, set out as a note under section 2055 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 1022(c) of Pub. L. 98-369 applicable to
reformations after Dec. 31, 1978, but inapplicable to any
reformation to which section 2055(e)(3) of this title as in effect
before July 18, 1984, applies, see section 1022(e)(1) of Pub. L.
98-369, set out as a note under section 2055 of this title.
Amendment by section 1032(b)(3) of Pub. L. 98-369 applicable to
taxable years beginning after July 18, 1984, see section 1032(c) of
Pub. L. 98-369, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section
204(4) of Pub. L. 97-473, set out as an Effective Date note under
section 7871 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Amendment by Pub. L. 97-248 effective Oct. 5, 1976, see section
286(c) of Pub. L. 97-248, set out as a note under section 501 of
this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 423(c)(2) of Pub. L. 97-34 provided that: ''The amendment
made by subsection (b) (amending this section) shall apply to
transfers after December 31, 1981.''
Amendment by section 442(c) of Pub. L. 97-34 applicable with
respect to gifts made after Dec. 31, 1981, see section 442(e) of
Pub. L. 97-34, set out as a note under section 2501 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 2124(e)(3) of Pub. L. 94-455 applicable with
respect to contributions or transfers made after June 13, 1976, see
section 2124(e)(4) of Pub. L. 94-455, set out as a note under
section 170 of this title.
EFFECTIVE DATE OF 1970 AMENDMENT
Amendment by Pub. L. 91-614 applicable with respect to gifts made
after Dec. 31, 1970, see section 102(e) of Pub. L. 91-614, set out
as a note under section 2501 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 201(d)(3) of Pub. L. 91-172 applicable to
gifts made after Dec. 31, 1969, except that the amendment of par.
(2) of subsec. (c) applicable to gifts made after July 31, 1969,
see section 201(g)(4)(D) of Pub. L. 91-172, set out as a note under
section 170 of this title.
Amendment by section 201(d)(4)(C), (D) of Pub. L. 91-172
applicable to gifts and transfers made after Dec. 31, 1969, see
section 201(g)(4)(E) of Pub. L. 91-172, set out as a note under
section 170 of this title.
CHARITABLE LEAD TRUSTS AND CHARITABLE REMAINDER TRUSTS IN CASE OF
INCOME AND GIFT TAXES
For inclusion of provisions comparable to section 2055(e)(3) of
this title in this section, see section 514(b) of Pub. L. 95-600,
set out as a note under section 2055 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 170, 501, 508, 1015,
2012, 2503, 2632, 2642, 4947, 4948, 6019, 7871 of this title; title
12 section 3051; title 15 section 80a-3; title 16 section 1285;
title 22 section 3307.
