As with gifts of long-term capital-gain securities or real estate, you are entitled to a charitable deduction for a gift of long-term capital-gain tangible personal property such as works of art, rare books, and stamp or coin collections not created by the donor. (Note: The top capital-gain tax rate on such assets is 28%.) How much you can deduct depends on the so-called standard of "related use."
Here is how the standard is applied: If the use of the contributed property is related to the exempt purposes of a charity (e.g., a painting to a museum or rare books to a library), you are entitled to a charitable income-tax deduction for the fair-market value of the property.
If the use of the contributed property is unrelated to the exempt purposes of the charity (e.g., stamp collection to the Navy League to sell and use the proceeds), you are entitled to a charitable deduction for your basis in the property.
A donor who contributes a work of art created by himself/herself is limited to cost basis for the charitable deduction.
Tangible Property |
Related Use |
Unrelated Use |
Fair-Market Value |
$20,000 |
$20,000 |
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The Navy League is an exempt organization, duly qualified under Section 501(c)(3) of the Internal Revenue Code, contributions to which are tax deductible in accordance with federal law.
If your donation is for a scholarship, the Navy League Foundation is a 501(c)(3) organization: Federal Tax ID 31-1677884.
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