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As discussed below, the reduction rules will limit the amount of charitable contribution deduction the donor can claim, however.

When IRC ยง170(e) property is transferred to charity, the amount of the charitable contribution income tax deduction is reduced by the amount that would have been ordinary income or long-term capital gain had the property been sold on the date of contribution. Green purchased publicly traded stock on January 1 for $10,000.

Additionally, in the absence of any rules to the contrary, Mr.

Smith calculates gain based on a first-in-first-out (FIFO) accounting method.

For purposes of determining if a charitable income tax deduction has been produced, the percentage limitations do not apply.