26 U.S.C. § 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 or 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.

(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 interests in the property are 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 interests in such property to the donee (or, if such donee is no longer in existence, to any person described in section 170(c)) on or 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.

Aug. 16, 1954, ch. 736 68A Stat. 410 Pub. L. 85–866, title I, § 30(d)Sept. 2, 195872 Stat. 1631 Pub. L. 91–172, title II, § 201(d)(3)Dec. 30, 196983 Stat. 561 Pub. L. 91–614, title I, § 102(c)(2)Dec. 31, 197084 Stat. 1841 Pub. L. 94–455, title XIIOct. 4, 197690 Stat. 1727 Pub. L. 97–34, title IVAug. 13, 198195 Stat. 317 Pub. L. 97–248, title II, § 286(b)(3)Sept. 3, 198296 Stat. 570 Pub. L. 97–473, title II, § 202(b)(7)Jan. 14, 198396 Stat. 2610 Pub. L. 98–369, div. A, title XJuly 18, 198498 Stat. 1028 Pub. L. 99–514, title XIV, § 1422(b)Oct. 22, 1986100 Stat. 2717 Pub. L. 100–203, title X, § 10711(a)(5)Dec. 22, 1987101 Stat. 1330–464 Pub. L. 109–280, title XIIAug. 17, 2006120 Stat. 1082 Pub. L. 110–172Dec. 29, 2007121 Stat. 2474 Pub. L. 115–141, div. U, title IV, § 401(a)(204)Mar. 23, 2018132 Stat. 1194(, ; , , ; , (4)(C), (D), , , 562; , , ; , §§ 1307(d)(1)(B)(iv), (v), 1313(b)(3), title XIX, § 1902(a)(11), (12)(D), title XXI, § 2124(e)(3), , , 1730, 1805, 1806, 1920; , §§ 423(b), 442(c), , , 322; , , ; , , ; , §§ 1022(c), 1032(b)(3), , , 1034; , , ; , (6), , ; , §§ 1218(c), 1234(c), , , 1101; , §§ 3(d)(2), 11(a)(16), , , 2485; , , .)

Editorial Notes

Codification

Pub. L. 109–280Sections 1218(c) and 1234(c) of , which directed the amendment of section 2522 without specifying the act to be amended, were executed to this section, which is section 2522 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.

Amendments

Pub. L. 115–1412018—Subsec. (c)(1). substituted “gift to or for” for “gift to of for”.

Pub. L. 110–172, § 11(a)(16)(A)2007—Subsec. (e)(1)(A). , in introductory provisions, substituted “all interests in the property are” for “all interest in the property is”.

Pub. L. 110–172, § 3(d)(2)(A)Subsec. (e)(2). , (B), redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows: “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.”

Pub. L. 110–172, § 11(a)(16)(B)Subsec. (e)(2)(A)(i). , substituted “interests” for “interest” and “on or before” for “before”.

Pub. L. 110–172, § 3(d)(2)(C)Subsec. (e)(2)(C). , added subpar. (C).

Pub. L. 110–172, § 3(d)(2)(B)Subsec. (e)(3). , redesignated par. (3) as (2).

Pub. L. 110–172, § 3(d)(2)(A)Subsec. (e)(4). , struck out heading and text of par. (4). Text read as follows: “For purposes of this subsection—

Additional contribution“(A) .—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.

Initial fractional contribution“(B) .—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).”

Pub. L. 109–280, § 1218(c)Subsecs. (e), (f). , added subsec. (e) and redesignated former subsec. (e) as (f). See Codification note above.

Pub. L. 100–2031987—Subsecs. (a)(2), (b)(2), (3). inserted “(or in opposition to)” after “on behalf of”.

Pub. L. 99–5141986—Subsecs. (d), (e). added subsec. (d) and redesignated former subsec. (d) as (e).

Pub. L. 98–369, § 1032(b)(3)Subsec. (d). , added par. (1) and redesignated former pars. (1) and (2) as (2) and (3), respectively.

Pub. L. 97–4731983—Subsec. (d). designated existing provisions as par. (1), substituted “bequests” for “gifts” second time appearing in par. (1) as so designated, and added par. (2).

Pub. L. 97–2481982—Subsec. (a). inserted provision that rules similar to rules of section 501(j) apply for purposes of par. (2).

Pub. L. 97–34, § 442(c)Subsec. (b). , substituted “year” for “quarter” in provision preceding par. (1).

Pub. L. 97–34, § 423(b)Subsec. (c)(3). , added par. (3).

Pub. L. 94–455, § 1902(a)(12)(D)1976—Subsec. (a)(1). , struck out “Territory” after “any State”.

Pub. L. 94–455Subsec. (a)(2). , §§ 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”.

Pub. L. 94–455, § 1902(a)(12)(D)Subsec. (b)(1). , struck out “Territory” after “any State”.

Pub. L. 94–455, § 1307(d)(1)(B)(v)Subsec. (b)(2). , 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”.

Pub. L. 94–455, § 2124(e)(3)Subsec. (c)(2). , 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”.

Pub. L. 94–455, § 1902(a)(11)Subsec. (d). , 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.

Pub. L. 91–6141970— substituted “quarter” for “year” in three places.

Pub. L. 91–172, § 201(d)(3)Subsec. (c). , substituted substantive provisions for simple reference to sections 503 and 681 in which such substantive provisions were formerly set out.

Pub. L. 85–8661958—Subsec. (c). substituted “503” for “504”.

Statutory Notes and Related Subsidiaries

Effective Date of 2007 Amendment

section 3(d)(2) of Pub. L. 110–172 Pub. L. 109–280 section 3(j) of Pub. L. 110–172 section 170 of this titleAmendment by effective as if included in the provisions of the Pension Protection Act of 2006, , to which such amendment relates, see , set out as a note under .

Effective Date of 2006 Amendment

section 1218(c) of Pub. L. 109–280Aug. 17, 2006section 1218(d) of Pub. L. 109–280 section 170 of this titleAmendment by applicable to contributions, bequests, and gifts made after , see , set out as a note under .

section 1234(c) of Pub. L. 109–280Aug. 17, 2006section 1234(d) of Pub. L. 109–280 section 170 of this titleAmendment by applicable to contributions made after the date which is 180 days after , see , set out as a note under .

Effective Date of 1987 Amendment

Pub. L. 100–203Dec. 22, 1987section 10711(c) of Pub. L. 100–203 section 170 of this titleAmendment by applicable with respect to activities after , see , set out as a note under .

Effective Date of 1986 Amendment

Pub. L. 99–514Dec. 31, 1986section 1422(e) of Pub. L. 99–514 section 2055 of this titleAmendment by applicable to transfers and contributions made after , see , set out as a note under .

Effective Date of 1984 Amendment

section 1022(c) of Pub. L. 98–369Dec. 31, 1978section 2055(e)(3) of this titleJuly 18, 1984section 1022(e)(1) of Pub. L. 98–369 section 2055 of this titleAmendment by applicable to reformations after , but inapplicable to any reformation to which as in effect before , applies, see , set out as a note under .

section 1032(b)(3) of Pub. L. 98–369July 18, 1984section 1032(c) of Pub. L. 98–369 section 170 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date of 1983 Amendment

Pub. L. 97–473 section 204(4) of Pub. L. 97–473 section 7871 of this titleFor effective date of amendment by , see , set out as an Effective Date note under .

Effective Date of 1982 Amendment

Pub. L. 97–248Oct. 5, 1976section 286(c) of Pub. L. 97–248 section 501 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1981 Amendment

Pub. L. 97–34, title IV, § 423(c)(2)Aug. 13, 198195 Stat. 317

December 31, 1981“The amendment made by subsection (b) [amending this section] shall apply to transfers after .”

, , , provided that:

section 442(c) of Pub. L. 97–34Dec. 31, 1981section 442(e) of Pub. L. 97–34 section 2501 of this titleAmendment by applicable with respect to gifts made after , see , set out as a note under .

Effective Date of 1976 Amendment

section 2124(e)(3) of Pub. L. 94–455June 13, 1976section 2124(e)(4) of Pub. L. 94–455 section 170 of this titleAmendment by applicable with respect to contributions or transfers made after , see , set out as a note under .

Effective Date of 1970 Amendment

Pub. L. 91–614Dec. 31, 1970section 102(e) of Pub. L. 91–614 section 2501 of this titleAmendment by applicable with respect to gifts made after , see , set out as a note under .

Effective Date of 1969 Amendment

section 201(d)(3) of Pub. L. 91–172Dec. 31, 1969July 31, 1969section 201(g)(4)(D) of Pub. L. 91–172 section 170 of this titleAmendment by applicable to gifts made after , except that the amendment of par. (2) of subsec. (c) applicable to gifts made after , see , set out as a note under .

Pub. L. 91–172Dec. 31, 1969section 201(g)(4)(E) of Pub. L. 91–172 section 170 of this titleAmendment by section 201(d)(4)(C), (D) of applicable to gifts and transfers made after , see , set out as a note under .

Charitable Lead Trusts and Charitable Remainder Trusts in Case of Income and Gift Taxes

section 2055(e)(3) of this title section 514(b) of Pub. L. 95–600 section 2055 of this titleFor inclusion of provisions comparable to in this section, see , set out as a note under .