Charitable Deduction – Tangible Personal Property

Course: Estate Planning
Lesson 11: Charitable Gifting Techniques

Student Question:

Why would a stamp collection donated to the Salvation Army NOT be deductible at FMV?

Thanks for your time!

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Instructor Response:

Hi,

Great question here.   A stamp collection is tangible personal property, the deduction depends on whether the charity’s use of the property is related to its charitable purpose. If the Salvation Army simply sells the collection to raise funds, which they likely would, the deduction would generally be limited to the donor’s basis rather than FMV.  We could probably add that to the question to make it more clear.

The classic example of an FMV deduction is something like artwork donated to a museum, where the charity actually uses the property in a way related to its exempt purpose.

Does that help clarify?