Non-Monetary Gifts

As with gifts of securities or real estate, a donor is entitled to a charitable deduction for gifts of tangible personal property (e.g. works of art, rare books, stamp or coin collections, etc.), which are called Gift-in-Kind. The extent of the allowable deduction for a gift of such property held long-term is dependent upon the standard of "related use."

Here's how the standard is applied: If the use of the contributed property is related to the exempt purposes of the charity (e.g., rare books to the library, a painting to the galleries, etc.), then the donor would be entitled to a charitable deduction for the full fair market value of the property, subject to the 30 percent ceiling and carry-over.

If the use of the contributed property is unrelated to the exempt purposes of the charity (e.g., stamp collection to a hospital to sell and use the proceeds), then the donor would be entitled to a charitable deduction only for his or her basis in the property.

One other note – if the donor is the creator of the contributed tangible asset (for example, the artist of a painting), then his or her deduction is limited to the actual cost in producing the asset.