Old law is bad law, but to the best of our knowledge, Sec. 170 of the
Internal Revenue Code (the part on charitable contributions) had not
changed fundamentally since the Omnibus Budget Reconciliation Act of
1993 made fair market deductions for gifts of appreciated property
permanent.  Thus, we were confident our sources that said deductions for
donated rental space are not allowed still were on the mark.

Nevertheless, Gregg Jackson's sage advice set off the computer chip
installed in my brain during law school (a 1st year requirement)
directing me to double-check our post.  I used the U.S. Code
Searchable at the U.S. House of Representatives Internet Law Library
<http://law.house.gov/usc.htm> which is current through January
1996.  In addition, I cross-referenced the following code section with U.S.
Code classification table located at the same site to ensure that the
provision had not changed in the final year of the 104th Congress.  In
other words, we are sure this is current.

Title 26, Subtitle A, Chapter 1, Subchapter B, Part VI, Section
170(f)(3)(A) of the United States Code reads:

"In the case of a contribution (not made by a transfer in trust) of an
interest in property which consists of less than the taxpayer's entire
interest in such property, a deduction shall be allowed under this
section only to the extent that the value of the interest contributed
would be allowable as a deduction under this section if such interest had
been transferred in trust.  For purposes of this subparagraph, a
contribution by a taxpayer of the right to use property shall be treated
as a contribution of less than the taxpayer's entire interest in such
property."

There are three exceptions: a contribution of a remainder interest in a
personal residence or farm; a contribution of an individual portion of
the taxpayer's entire interest in property; and a qualified conservation
contribution.

This section is the source for the two examples we cited in our previous
post.  Those references said specifically that donated space is "not" tax
deductible.

However, such deductions might be allowed under state law.  Since a
number of people thought these deductions were allowed, perhaps this
is the reason for the confusion.  If allowed in some states, please pass
this info. along to us.  This question is likely to resurface.

Finally, although expensive, consulting a tax lawyer is always the safest
bet especially when a donor's goodwill is at stake.  But to the extent we
can, we are here to help.

Sorry for the delay.

[log in to unmask]
[log in to unmask]
AAM Government Affairs

the usual disclaimers . . .
******************************************************************

On Mon, 6 Jan 1997 [log in to unmask] wrote:

> Hello, Folks --
>
> In light of the recent thread about tax deductions allowable for donated
> space, I thought I'd put in my $.02, FWIW.
>
> When I clerked in a law library during grad school, one of the rules that the
> librarian pounded into my feeble little brain was <Old law is bad law> and tax
> law is one of the most volatile areas of the law.
>
> I'm not saying that the citations Andy Finch mentioned in an earlier post are
> wrong. However, given the dates of the publications, 1991 and 1994, I'd
> suggest doing some research to substantiate the information.
>
> I think anyone's best bet for getting information on the tax law re:donations
> is to talk with a tax attorney. They will have access to all the latest
> findings and interpretations of the law. The legal fees you'll have to pay are
> probably less than any penalties the IRS might levy if you don't have the
> right info.
>
> BTW, on a completely different note...Try doing a search on your favorite
> search engine for <Sara Crewe>. You might be interested in what turns up.  Or
> maybe not.
>
> Gregg Jackson
> Librarian
> The Children's Museum of Indianapolis
> "Where children grow up...and adults don't have to!"
>
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
>   email: [log in to unmask]
>   TCM-I Web Site:  http://www.childrensmuseum.org
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
>   "And Mario's slowing on the backstretch..."
>   -- Tom Carnegie (on any number of occasions)
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
>