These slides are taken from the graduate financial planning course "Introduction to Charitable Planning" at Texas Tech University. Details at www.EncourageGenerosity.com

2. All slides are
taken from this
book which
includes
detailed
explanations of
all concepts.
Available from
Amazon.com
Full color version available at
www.createspace.com/4707238

3. What is it?
When a donor
gives some
rights to
property but
keeps others

4. Charity I give you
this car, but I keep
the right to use it
for 1 year.
Can I deduct
current value less
1 year of
depreciation?

5. I can’t seem to rent out my office
building, so I’ll donate its use to
charity for a year. Can I deduct?

6. I give the charity my land, but I
keep all rights to extract minerals

7. Normally, donor
can’t keep some
rights and
deduct a partial
interest
gift

8. Charity I give you
this car, but I keep
the right to use it
for 1 year.
No deduction if
any ownership
rights are
retained.

9. No deduction if any ownership rights
are retained (I still own rental
property)

10. No deduction if ownership rights
are retained (I own minerals)

11. Normally, donor
can’t keep some
rights and
deduct a partial
interest
gift

14. If I could take the
deduction now, what
would be left for the
charity in 1 year?
I give charity this car, but
keep the right to use it for
1 year.

15. I give charity the right to
use my newly planted
olive tree orchard for 7
years.
Olive trees don’t
produce for the
first seven years

16. Charity I give you my
$2,000,000 company, but
keep the right to buy it back
in 3 years for $2,000,000.
[Can I deduct $2,000,000?]
Our only product is a new cancer drug that will
be approved or rejected by the FDA in 3 years

17. Normally, donor
can’t keep some
rights and
deduct a partial
interest
gift

18. The donor can deduct
if he gives all or an
“undivided portion”
of his interest
Other Exceptions
• Remainder interest in a
home or farm
• Charitable remainder/
lead trust or pooled
income fund
• Qualified conservation
easement

19. I can’t cheat the charity by making my share
more valuable if (1) I give away everything I own
or (2) I own exactly the
same rights as the charity
– just a different
percentage

20. Divided share v. undivided share
Rights to walnuts from
specific tree branches
Divided
Share
A 15% ownership interest in the whole tree
Undivided
Share
My Ownership Rights My Gift
A walnut tree

21. Rights to walnuts from
specific tree branches
Divided
Share
A 15% ownership interest in the whole tree
Undivided
Share
My Ownership Rights My Gift
A walnut tree
A divided share is not deductible

22. Rights to walnuts from
specific tree branches
Divided
Share
A 15% ownership interest in the whole tree
Undivided
Share
My Ownership Rights My Gift
A walnut tree
An undivided share of property is deductible

23. Divided
Share
Undivided
Share
I donate a
West Texas
cotton farm,
but keep all the
mineral rights
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Divided or undivided share?

24. Divided
Share
Undivided
Share
I donate a
West Texas
cotton farm,
but keep all the
mineral rights
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Not Deductible

25. Divided
Share
Undivided
Share
I donate a 5%
interest as tenants
in common in a
West Texas cotton
farm including all
the mineral rights
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Divided or undivided share?

26. Divided
Share
Undivided
Share
I donate a 5%
interest as tenants
in common in a
West Texas cotton
farm including all
the mineral rights
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Deductible

27. Divided
Share
Undivided
Share
I donate a
painting, but
keep all digital
and
reproduction
rights
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Divided or undivided share?

28. Divided
Share
Undivided
Share
I donate a
painting, but
keep all digital
and
reproduction
rights
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Not Deductible

29. Divided
Share
Undivided
Share
I donate a 1/12
ownership
interest in a
painting including
the right to
possess 1 month
of every year
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Divided or undivided share?

30. Divided
Share
Undivided
Share
I donate a 1/12
ownership
interest in a
painting including
the right to
possess 1 month
of every year
A 15% ownership interest in the whole tree
Rights to walnuts from
specific tree branches
Deductible, if…

31. Fractional shares in tangible
personal property
• Deduction is lesser of
value during first or
later transfers
• All of the donor’s rights must be
given to charity within 10 years (or
at donor’s death if earlier)

32. What happens if I don’t transfer the
rest of it to charity within 10 years?

33. Recapture
Previous
deductions are
counted as
ordinary income,
plus interest, plus
a 10% penalty

34. Rights to walnuts from
specific tree branches
Divided
Share
A 15% ownership interest in the whole tree
Undivided
Share
My Ownership Rights My Gift
A walnut tree
When can I deduct a gift of partial rights?

35. I can deduct a gift of all or an undivided share of all
my rights even if I own only a partial interest
All of
donor’s
interests
Undivided
share of
donor’s
interests
15% ownership in my rights
Rights to walnuts
from specific tree
branches
My Ownership Rights My Gift
Rights to walnuts from
specific tree branches

36. I give my land to a charity
although I never owned the
mineral rights

37. All of
donor’s
interests
Undivided
share of
donor’s
interests
5% ownership in my rights
My Ownership Rights My Gift
Rights to walnuts from
specific tree branches
I give my land
to a charity,
although I
never owned
the mineral
rights

38. I give a 5% interest as tenants
in common in my land to a
charity although I never
owned the mineral rights

39. All of
donor’s
interests
Undivided
share of
donor’s
interests
5% ownership in my rights
My Ownership Rights My Gift
Rights to walnuts from
specific tree branches
I give a 5%
interest as
tenants in
common in my
land to a charity,
although I never
owned the
mineral rights

40. Next I give 11/12 interest in
my life estate, keeping the
right to use every September
Deductible as gift of
remainder interest in home
Deductible as an undivided
share of all the interests
owned by the donor
I give charity the right to
own my vacation home after
I die by a remainder deed
Rev. Rul. 75-420; 1975-2 C.B. 78

41. All of
donor’s
interests
Undivided
share of
donor’s
interests
11/12 ownership in my rights
My Ownership Rights My Gift
Rights to walnuts from
specific tree branches
I own only a life
estate (right to
use for life). I
give 11/12 of it
to charity.

42. If all interests are given to charity, each
divided portion is deductible
To:
The Salvation
Army
To:
The Red Cross
To:
Texas Tech
University

44. Summary
If you don’t give or share all of your rights,
you get no deduction
(unless it is a designated exception)

46. Help me
HERE
convince my bosses that continuing to build and
post these slide sets is not a waste of time. If
you work for a nonprofit or advise donors and
you reviewed these slides, please let me know
by clicking

47. If you clicked on
the link to let
me know you
reviewed these
slides…
Thank
You!

48. This slide set is from the curriculum for
the Graduate Certificate in Charitable
Financial Planning at Texas Tech
University, home to the nation’s largest
graduate program in personal financial
planning.
To find out more about the online
Graduate Certificate in Charitable
Financial Planning go to
www.EncourageGenerosity.com
To find out more about the M.S. or
Ph.D. in personal financial planning at
Texas Tech University, go to
www.depts.ttu.edu/pfp/
Graduate Studies in
Charitable Financial Planning
at Texas Tech University