It's entirely true that the IRS does not take kindly to disposal of
donated materials that have been used for tax deductions.  However,
there's no hard-and-fast rule prohibiting disposal within two years of
the gift.

Rather, the IRS requires that if you dispose of the property within two
years, you must notify the agency of this fact by filing Form 8282.  You
must describe the property, the method of disposal, and the price you
got.  With this information, the IRS may be able to reopen the donor's
filing to see whether the price you got was way out of line compared to
the value the donor claimed.  If he claimed a million dollars, and you
only got a hundred thousand, the IRS may make an adjustment to the
donor's deduction.

Also, the IRS could make a further radical adjustment if it found that
the donor knew or had reason to know that the recipient did not intend
to use the property for carrying out its mission.  And using the
proceeds of a sale does not count as using the property itself.

In theory, you could hang onto something for two years, then sell it,
and the IRS would not be the wiser.  This is not an advisable course,
however, since basically it's tantamount to tax fraud, and the
consequences of discovery could be catastrophic.

Andy Finch
AAM Government Affairs
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        The IRS does not
> take too kindly to museums that don't hold on to donated materials
> that have
> been used for tax deductions... .  I think there
> is a rule that museums need to hold onto such holdings over some set
> value for
> a period of a couple of years before they can remove them.