HR 1432 — VETT Act

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

 In compliance with clause 3(e) of rule XIII of the rules of 
the House of Representatives, changes in existing aw made by 
the bill, as reported, are shown as follows.

 Changes in Existing Law Made by the Bill, as Reported

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 INTERNAL REVENUE CODE OF 1986

TITLE 26--INTERNAL REVENUE CODE

 * * * * * * *

Subtitle A--Income Taxes

 * * * * * * *

CHAPTER 1--NORMAL TAXES AND SURTAXES

 * * * * * * *

Subchapter B--COMPUTATION OF TAXABLE INCOME

 * * * * * * *

PART VI--ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS

 * * * * * * *

SEC. 170. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS.

 (a) Allowance of deduction.--
 (1) General rule.--There shall be allowed as a 
 deduction any charitable contribution (as defined in 
 subsection (c)) payment of which is made within the 
 taxable year. A charitable contribution shall be 
 allowable as a deduction only if verified under 
 regulations prescribed by the Secretary.
 (2) Corporations on accrual basis.--In the case of a 
 corporation reporting its taxable income on the accrual 
 basis, if--
 (A) the board of directors authorizes a 
 charitable contribution during any taxable 
 year, and
 (B) payment of such contribution is made 
 after the close of such taxable year and on or 
 before the 15th day of the fourth month 
 following the close of such taxable year,
 then the taxpayer may elect to treat such contribution 
 as paid during such taxable year. The election may be 
 made only at the time of the filing of the return for 
 such taxable year, and shall be signified in such 
 manner as the Secretary shall by regulations prescribe.
 (3) Future interests in tangible personal property.--
 For purposes of this section, payment of a charitable 
 contribution which consists of a future interest in 
 tangible personal property shall be treated as made 
 only when all intervening interests in, and rights to 
 the actual possession or enjoyment of, the property 
 have expired or are held by persons other than the 
 taxpayer or those standing in a relationship to the 
 taxpayer described in section 267(b) or 707(b). For 
 purposes of the preceding sentence, a fixture which is 
 intended to be severed from the real property shall be 
 treated as tangible personal property.
 (b) Percentage limitations.--
 (1) Individuals.--In the case of an individual, the 
 deduction provided in subsection (a) shall be limited 
 as provided in the succeeding subparagraphs.
 (A) General rule.--Any charitable 
 contribution to--
 (i) a church or a convention or 
 association of churches,
 (ii) an educational organization 
 which normally maintains a regular 
 faculty and curriculum and normally has 
 a regularly enrolled body of pupils or 
 students in attendance at the place 
 where its educational activities are 
 regularly carried on,
 (iii) an organization the principal 
 purpose or functions of which are the 
 providing of medical or hospital care 
 or medical education or medical 
 research, if the organization is a 
 hospital, or if the organization is a 
 medical research organization directly 
 engaged in the continuous active 
 conduct of medical research in 
 conjunction with a hospital, and during 
 the calendar year in which the 
 contribution is made such organization 
 is committed to spend such 
 contributions for such research before 
 January 1 of the fifth calendar year 
 which begins after the date such 
 contribution is made,
 (iv) an organization which normally 
 receives a substantial part of its 
 support (exclusive of income received 
 in the exercise or performance by such 
 organization of its charitable, 
 educational, or other purpose or 
 function constituting the basis for its 
 exemption under section 501(a)) from 
 the United States or any State or 
 political subdivision thereof or from 
 direct or indirect contributions from 
 the general public, and which is 
 organized and operated exclusively to 
 receive, hold, invest, and administer 
 property and to make expenditures to or 
 for the benefit of a college or 
 university which is an organization 
 referred to in clause (ii) of this 
 subparagraph and which is an agency or 
 instrumentality of a State or political 
 subdivision thereof, or which is owned 
 or operated by a State or political 
 subdivision thereof or by an agency or 
 instrumentality of one or more States 
 or political subdivisions,
 (v) a governmental unit referred to 
 in subsection (c)(1),
 (vi) an organization referred to in 
 subsection (c)(2) which normally 
 receives a substantial part of its 
 support (exclusive of income received 
 in the exercise or performance by such 
 organization of its charitable, 
 educational, or other purpose or 
 function constituting the basis for its 
 exemption under section 501(a)) from a 
 governmental unit referred to in 
 subsection (c)(1) or from direct or 
 indirect contributions from the general 
 public,
 (vii) a private foundation described 
 in subparagraph (F),
 (viii) an organization described in 
 section 509(a)(2) or (3), [or]
 (ix) an agricultural research 
 organization directly engaged in the 
 continuous active conduct of 
 agricultural research (as defined in 
 section 1404 of the National 
 Agricultural Research, Extension, and 
 Teaching Policy Act of 1977) in 
 conjunction with a land-grant college 
 or university (as defined in such 
 section) or a non-land grant college of 
 agriculture (as defined in such 
 section), and during the calendar year 
 in which the contribution is made such 
 organization is committed to spend such 
 contribution for such research before 
 January 1 of the fifth calendar year 
 which begins after the date such 
 contribution is made, or
 (x) an organization described in 
 section 501(c)(19) that is a federally 
 chartered corporation,
 shall be allowed to the extent that the 
 aggregate of such contributions does not exceed 
 50 percent of the taxpayer's contribution base 
 for the taxable year.
 (B) Other contributions.--Any charitable 
 contribution other than a charitable 
 contribution to which subparagraph (A) applies 
 shall be allowed to the extent that the 
 aggregate of such contributions does not exceed 
 the lesser of--
 (i) 30 percent of the taxpayer's 
 contribution base for the taxable year, 
 or
 (ii) the excess of 50 percent of the 
 taxpayer's contribution base for the 
 taxable year over the amount of 
 charitable contributions allowable 
 under subparagraph (A) (determined 
 without regard to subparagraph (C)).
 If the aggregate of such contributions exceeds 
 the limitation of the preceding sentence, such 
 excess shall be treated (in a manner consistent 
 with the rules of subsection (d)(1)) as a 
 charitable contribution (to which subparagraph 
 (A) does not apply) in each of the 5 succeeding 
 taxable years in order of time.
 (C) Special limitation with respect to 
 contributions described in subparagraph (A) of 
 certain capital gain property.--
 (i) In the case of charitable 
 contributions described in subparagraph 
 (A) of capital gain property to which 
 subsection (e)(1)(B) does not apply, 
 the total amount of contributions of 
 such property which may be taken into 
 account under subsection (a) for any 
 taxable year shall not exceed 30 
 percent of the taxpayer's contribution 
 base for such year. For purposes of 
 this subsection, contributions of 
 capital gain property to which this 
 subparagraph applies shall be taken 
 into account after all other charitable 
 contributions (other than charitable 
 contributions to which subparagraph (D) 
 applies).
 (ii) If charitable contributions 
 described in subparagraph (A) of 
 capital gain property to which clause 
 (i) applies exceeds 30 percent of the 
 taxpayer's contribution base for any 
 taxable year, such excess shall be 
 treated, in a manner consistent with 
 the rules of subsection (d)(1), as a 
 charitable contribution of capital gain 
 property to which clause (i) applies in 
 each of the 5 succeeding taxable years 
 in order of time.
 (iii) At the election of the taxpayer 
 (made at such time and in such manner 
 as the Secretary prescribes by 
 regulations), subsection (e)(1) shall 
 apply to all contributions of capital 
 gain property (to which subsection 
 (e)(1)(B) does not otherwise apply) 
 made by the taxpayer during the taxable 
 year. If such an election is made, 
 clauses (i) and (ii) shall not apply to 
 contributions of capital gain property 
 made during the taxable year, and, in 
 applying subsection (d)(1) for such 
 taxable year with respect to 
 contributions of capital gain property 
 made in any prior contribution year for 
 which an election was not made under 
 this clause, such contributions shall 
 be reduced as if subsection (e)(1) had 
 applied to such contributions in the 
 year in which made.
 (iv) For purposes of this paragraph, 
 the term ``capital gain property'' 
 means, with respect to any 
 contribution, any capital asset the 
 sale of which at its fair market value 
 at the time of the contribution would 
 have resulted in gain which would have 
 been long-term capital gain. For 
 purposes of the preceding sentence, any 
 property which is property used in the 
 trade or business (as defined in 
 section 1231(b)) shall be treated as a 
 capital asset.
 (D) Special limitation with respect to 
 contributions of capital gain property to 
 organizations not described in subparagraph 
 (A).--
 (i) In general.--In the case of 
 charitable contributions (other than 
 charitable contributions to which 
 subparagraph (A) applies) of capital 
 gain property, the total amount of such 
 contributions of such property taken 
 into account under subsection (a) for 
 any taxable year shall not exceed the 
 lesser of--
 (I) 20 percent of the 
 taxpayer's contribution base 
 for the taxable year, or
 (II) the excess of 30 percent 
 of the taxpayer's contribution 
 base for the taxable year over 
 the amount of the contributions 
 of capital gain property to 
 which subparagraph (C) applies.
 For purposes of this subsection, contributions 
 of capital gain property to which this 
 subparagraph applies shall be taken into 
 account after all other charitable 
 contributions.
 (ii) Carryover.--If the aggregate 
 amount of contributions described in 
 clause (i) exceeds the limitation of 
 clause (i), such excess shall be 
 treated (in a manner consistent with 
 the rules of subsection (d)(1)) as a 
 charitable contribution of capital gain 
 property to which clause (i) applies in 
 each of the 5 succeeding taxable years 
 in order of time.
 (E) Contributions of qualified conservation 
 contributions.--
 (i) In general.--Any qualified 
 conservation contribution (as defined 
 in subsection (h)(1)) shall be allowed 
 to the extent the aggregate of such 
 contributions does not exceed the 
 excess of 50 percent of the taxpayer's 
 contribution base over the amount of 
 all other charitable contributions 
 allowable under this paragraph.
 (ii) Carryover.--If the aggregate 
 amount of contributions described in 
 clause (i) exceeds the limitation of 
 clause (i), such excess shall be 
 treated (in a manner consistent with 
 the rules of subsection (d)(1)) as a 
 charitable contribution to which clause 
 (i) applies in each of the 15 
 succeeding years in order of time.
 (iii) Coordination with other 
 subparagraphs.--For purposes of 
 applying this subsection and subsection 
 (d)(1), contributions described in 
 clause (i) shall not be treated as 
 described in subparagraph (A), (B), 
 (C), or (D) and such subparagraphs 
 shall apply without regard to such 
 contributions.
 (iv) Special rule for contribution of 
 property used in agriculture or 
 livestock production.--
 (I) In general.--If the 
 individual is a qualified 
 farmer or rancher for the 
 taxable year for which the 
 contribution is made, clause 
 (i) shall be applied by 
 substituting ``100 percent'' 
 for ``50 percent''.
 (II) Exception.--Subclause 
 (I) shall not apply to any 
 contribution of property made 
 after the date of the enactment 
 of this subparagraph which is 
 used in agriculture or 
 livestock production (or 
 available for such production) 
 unless such contribution is 
 subject to a restriction that 
 such property remain available 
 for such production. This 
 subparagraph shall be applied 
 separately with respect to 
 property to which subclause (I) 
 does not apply by reason of the 
 preceding sentence prior to its 
 application to property to 
 which subclause (I) does apply.
 (v) Definition.--For purposes of 
 clause (iv), the term ``qualified 
 farmer or rancher'' means a taxpayer 
 whose gross income from the trade or 
 business of farming (within the meaning 
 of section 2032A(e)(5)) is greater than 
 50 percent of the taxpayer's gross 
 income for the taxable year.
 (F) Certain private foundations.--The private 
 foundations referred to in subparagraph 
 (A)(vii) and subsection (e)(1)(B) are--
 (i) a private operating foundation 
 (as defined in section 4942(j)(3)),
 (ii) any other private foundation (as 
 defined in section 509(a)) which, not 
 later than the 15th day of the third 
 month after the close of the 
 foundation's taxable year in which 
 contributions are received, makes 
 qualifying distributions (as defined in 
 section 4942(g), without regard to 
 paragraph (3) thereof), which are 
 treated, after the application of 
 section 4942(g)(3), as distributions 
 out of corpus (in accordance with 
 section 4942(h)) in an amount equal to 
 100 percent of such contributions, and 
 with respect to which the taxpayer 
 obtains adequate records or other 
 sufficient evidence from the foundation 
 showing that the foundation made such 
 qualifying distributions, and
 (iii) a private foundation all of the 
 contributions to which are pooled in a 
 common fund and which would be 
 described in section 509(a)(3) but for 
 the right of any substantial 
 contributor (hereafter in this clause 
 called ``donor'') or his spouse to 
 designate annually the recipients, from 
 among organizations described in 
 paragraph (1) of section 509(a), of the 
 income attributable to the donor's 
 contribution to the fund and to direct 
 (by deed or by will) the payment, to an 
 organization described in such 
 paragraph (1), of the corpus in the 
 common fund attributable to the donor's 
 contribution; but this clause shall 
 apply only if all of the income of the 
 common fund is required to be (and is) 
 distributed to one or more 
 organizations described in such 
 paragraph (1) not later than the 15th 
 day of the third month after the close 
 of the taxable year in which the income 
 is realized by the fund and only if all 
 of the corpus attributable to any 
 donor's contribution to the fund is 
 required to be (and is) distributed to 
 one or more of such organizations not 
 later than one year after his death or 
 after the death of his surviving spouse 
 if she has the right to designate the 
 recipients of such corpus.
 (G) Increased limitation for cash 
 contributions.--
 (i) In general.--In the case of any 
 contribution of cash to an organization 
 described in subparagraph (A), the 
 total amount of such contributions 
 which may be taken into account under 
 subsection (a) for any taxable year 
 beginning after December 31, 2017, and 
 before January 1, 2026, shall not 
 exceed 60 percent of the taxpayer's 
 contribution base for such year.
 (ii) Carryover.--If the aggregate 
 amount of contributions described in 
 clause (i) exceeds the applicable 
 limitation under clause (i) for any 
 taxable year described in such clause, 
 such excess shall be treated (in a 
 manner consistent with the rules of 
 subsection (d)(1)) as a charitable 
 contribution to which clause (i) 
 applies in each of the 5 succeeding 
 years in order of time.
 (iii) Coordination with subparagraphs 
 (A) and (B).--
 (I) In general.--
 Contributions taken into 
 account under this subparagraph 
 shall not be taken into account 
 under subparagraph (A).
 (II) Limitation reduction.--
 For each taxable year described 
 in clause (i), and each taxable 
 year to which any contribution 
 under this subparagraph is 
 carried over under clause (ii), 
 subparagraph (A) shall be 
 applied by reducing (but not 
 below zero) the contribution 
 limitation allowed for the 
 taxable year under such 
 subparagraph by the aggregate 
 contributions allowed under 
 this subparagraph for such 
 taxable year, and subparagraph 
 (B) shall be applied by 
 treating any reference to 
 subparagraph (A) as a reference 
 to both subparagraph (A) and 
 this subparagraph.
 (H) Contribution base defined.--For purposes 
 of this section, the term ``contribution base'' 
 means adjusted gross income (computed without 
 regard to any net operating loss carryback to 
 the taxable year under section 172).
 (2) Corporations.--In the case of a corporation--
 (A) In general.--The total deductions under 
 subsection (a) for any taxable year (other than 
 for contributions to which subparagraph (B) or 
 (C) applies) shall not exceed 10 percent of the 
 taxpayer's taxable income.
 (B) Qualified conservation contributions by 
 certain corporate farmers and ranchers.--
 (i) In general.--Any qualified 
 conservation contribution (as defined 
 in subsection (h)(1))--
 (I) which is made by a 
 corporation which, for the 
 taxable year during which the 
 contribution is made, is a 
 qualified farmer or rancher (as 
 defined in paragraph (1)(E)(v)) 
 and the stock of which is not 
 readily tradable on an 
 established securities market 
 at any time during such year, 
 and
 (II) which, in the case of 
 contributions made after the 
 date of the enactment of this 
 subparagraph, is a contribution 
 of property which is used in 
 agriculture or livestock 
 production (or available for 
 such production) and which is 
 subject to a restriction that 
 such property remain available 
 for such production,
 shall be allowed to the extent the aggregate 
 of such contributions does not exceed the 
 excess of the taxpayer's taxable income over 
 the amount of charitable contributions 
 allowable under subparagraph (A).
 (ii) Carryover.--If the aggregate 
 amount of contributions described in 
 clause (i) exceeds the limitation of 
 clause (i), such excess shall be 
 treated (in a manner consistent with 
 the rules of subsection (d)(2)) as a 
 charitable contribution to which clause 
 (i) applies in each of the 15 
 succeeding taxable years in order of 
 time.
 (C) Qualified conservation contributions by 
 certain Native Corporations.--
 (i) In general.--Any qualified 
 conservation contribution (as defined 
 in subsection (h)(1)) which--
 (I) is made by a Native 
 Corporation, and
 (II) is a contribution of 
 property which was land 
 conveyed under the Alaska 
 Native Claims Settlement Act,
 shall be allowed to the extent that the 
 aggregate amount of such contributions does not 
 exceed the excess of the taxpayer's taxable 
 income over the amount of charitable 
 contributions allowable under subparagraph (A).
 (ii) Carryover.--If the aggregate 
 amount of contributions described in 
 clause (i) exceeds the limitation of 
 clause (i), such excess shall be 
 treated (in a manner consistent with 
 the rules of subsection (d)(2)) as a 
 charitable contribution to which clause 
 (i) applies in each of the 15 
 succeeding taxable years in order of 
 time.
 (iii) Native Corporation.--For 
 purposes of this subparagraph, the term 
 ``Native Corporation'' has the meaning 
 given such term by section 3(m) of the 
 Alaska Native Claims Settlement Act.
 (D) Taxable income.--For purposes of this 
 paragraph, taxable income shall be computed 
 without regard to--
 (i) this section,
 (ii) part VIII (except section 248),
 (iii) any net operating loss 
 carryback to the taxable year under 
 section 172,
 (iv) any capital loss carryback to 
 the taxable year under section 
 1212(a)(1)
 (v) section 199A(g).
 (c) Charitable contribution defined.--For purposes of this 
section, the term ``charitable contribution'' means a 
contribution or gift to or for the use of--
 (1) A State, a possession of the United States, or 
 any political subdivision of any of the foregoing, or 
 the United States or the District of Columbia, but only 
 if the contribution or gift is made for exclusively 
 public purposes.
 (2) A corporation, trust, or community chest, fund, 
 or foundation--
 (A) created or organized in the United States 
 or in any possession thereof, or under the law 
 of the United States, any State, the District 
 of Columbia, or any possession of the United 
 States;
 (B) organized and operated exclusively for 
 religious, charitable, scientific, literary, or 
 educational purposes, or to foster national or 
 international amateur sports competition (but 
 only if no part of its activities involve the 
 provision of athletic facilities or equipment), 
 or for the prevention of cruelty to children or 
 animals;
 (C) no part of the net earnings of which 
 inures to the benefit of any private 
 shareholder or individual; and
 (D) which is not disqualified for tax 
 exemption under section 501(c)(3) by reason of 
 attempting to influence legislation, and which 
 does not participate in, or intervene in 
 (including the publishing or distributing of 
 statements), any political campaign on behalf 
 of (or in opposition to) any candidate for 
 public office.
 A contribution or gift by a corporation to a trust, 
 chest, fund, or foundation shall be deductible by 
 reason of this paragraph only if it is to be used 
 within the United States or any of its possessions 
 exclusively for purposes specified in subparagraph (B). 
 Rules similar to the rules of section 501(j) shall 
 apply for purposes of this paragraph.
 (3) A post or organization of war veterans, or an 
 auxiliary unit or society of, or trust or foundation 
 for, any such post or organization--
 (A) organized in the United States or any of 
 its possessions, and
 (B) no part of the net earnings of which 
 inures to the benefit of any private 
 shareholder or individual.
 (4) In the case of a contribution or gift by an 
 individual, a domestic fraternal society, order, or 
 association, operating under the lodge system, but only 
 if such contribution or gift is to be used exclusively 
 for religious, charitable, scientific, literary, or 
 educational purposes, or for the prevention of cruelty 
 to children or animals.
 (5) A cemetery company owned and operated exclusively 
 for the benefit of its members, or any corporation 
 chartered solely for burial purposes as a cemetery 
 corporation and not permitted by its charter to engage 
 in any business not necessarily incident to that 
 purpose, if such company or corporation is not operated 
 for profit and no part of the net earnings of such 
 company or corporation inures to the benefit of any 
 private shareholder or individual.
 (6) An organization described in section 501(c)(19) 
 that is a federally chartered corporation.
For purposes of this section, the term ``charitable 
contribution'' also means an amount treated under subsection 
(g) as paid for the use of an organization described in 
paragraph (2), (3), or (4).
 (d) Carryovers of excess contributions.--
 (1) Individuals.--
 (A) In general.--In the case of an 
 individual, if the amount of charitable 
 contributions described in subsection (b)(1)(A) 
 payment of which is made within a taxable year 
 (hereinafter in this paragraph referred to as 
 the ``contribution year'') exceeds 50 percent 
 of the taxpayer's contribution base for such 
 year, such excess shall be treated as a 
 charitable contribution described in subsection 
 (b)(1)(A) paid in each of the 5 succeeding 
 taxable years in order of time, but, with 
 respect to any such succeeding taxable year, 
 only to the extent of the lesser of the two 
 following amounts:
 (i) the amount by which 50 percent of 
 the taxpayer's contribution base for 
 such succeeding taxable year exceeds 
 the sum of the charitable contributions 
 described in subsection (b)(1)(A) 
 payment of which is made by the 
 taxpayer within such succeeding taxable 
 year (determined without regard to this 
 subparagraph) and the charitable 
 contributions described in subsection 
 (b)(1)(A) payment of which was made in 
 taxable years before the contribution 
 year which are treated under this 
 subparagraph as having been paid in 
 such succeeding taxable year; or
 (ii) in the case of the first 
 succeeding taxable year, the amount of 
 such excess, and in the case of the 
 second, third, fourth, or fifth 
 succeeding taxable year, the portion of 
 such excess not treated under this 
 subparagraph as a charitable 
 contribution described in subsection 
 (b)(1)(A) paid in any taxable year 
 intervening between the contribution 
 year and such succeeding taxable year.
 (B) Special rule for net operating loss 
 carryovers.--In applying subparagraph (A), the 
 excess determined under subparagraph (A) for 
 the contribution year shall be reduced to the 
 extent that such excess reduces taxable income 
 (as computed for purposes of the second 
 sentence of section 172(b)(2)) and increases 
 the net operating loss deduction for a taxable 
 year succeeding the contribution year.
 (2) Corporations.--
 (A) In general.--Any contribution made by a 
 corporation in a taxable year (hereinafter in 
 this paragraph referred to as the 
 ``contribution year'') in excess of the amount 
 deductible for such year under subsection 
 (b)(2)(A) shall be deductible for each of the 5 
 succeeding taxable years in order of time, but 
 only to the extent of the lesser of the two 
 following amounts: (i) the excess of the 
 maximum amount deductible for such succeeding 
 taxable year under subsection (b)(2)(A) over 
 the sum of the contributions made in such year 
 plus the aggregate of the excess contributions 
 which were made in taxable years before the 
 contribution year and which are deductible 
 under this subparagraph for such succeeding 
 taxable year; or (ii) in the case of the first 
 succeeding taxable year, the amount of such 
 excess contribution, and in the case of the 
 second, third, fourth, or fifth succeeding 
 taxable year, the portion of such excess 
 contribution not deductible under this 
 subparagraph for any taxable year intervening 
 between the contribution year and such 
 succeeding taxable year.
 (B) Special rule for net operating loss 
 carryovers.--For purposes of subparagraph (A), 
 the excess of--
 (i) the contributions made by a 
 corporation in a taxable year to which 
 this section applies, over
 (ii) the amount deductible in such 
 year under the limitation in subsection 
 (b)(2)(A),
 shall be reduced to the extent that such excess 
 reduces taxable income (as computed for 
 purposes of the second sentence of section 
 172(b)(2)) and increases a net operating loss 
 carryover under section 172 to a succeeding 
 taxable year.
 (e) Certain contributions of ordinary income and capital gain 
property.--
 (1) General rule.--The amount of any charitable 
 contribution of property otherwise taken into account 
 under this section shall be reduced by the sum of--
 (A) the amount of gain which would not have 
 been long-term capital gain (determined without 
 regard to section 1221(b)(3)) if the property 
 contributed had been sold by the taxpayer at 
 its fair market value (determined at the time 
 of such contribution), and
 (B) in the case of a charitable 
 contribution--
 (i) of tangible personal property--
 (I) if the use by the donee 
 is unrelated to the purpose or 
 function constituting the basis 
 for its exemption under section 
 501 (or, in the case of a 
 governmental unit, to any 
 purpose or function described 
 in subsection (c)), or
 (II) which is applicable 
 property (as defined in 
 paragraph (7)(C), but without 
 regard to clause (ii) thereof) 
 which is sold, exchanged, or 
 otherwise disposed of by the 
 donee before the last day of 
 the taxable year in which the 
 contribution was made and with 
 respect to which the donee has 
 not made a certification in 
 accordance with paragraph 
 (7)(D),
 (ii) to or for the use of a private 
 foundation (as defined in section 
 509(a)), other than a private 
 foundation described in subsection 
 (b)(1)(F),
 (iii) of any patent, copyright (other 
 than a copyright described in section 
 1221(a)(3) or 1231(b)(1)(C)), 
 trademark, trade name, trade secret, 
 know-how, software (other than software 
 described in section 197(e)(3)(A)(i)), 
 or similar property, or applications or 
 registrations of such property, or
 (iv) of any taxidermy property which 
 is contributed by the person who 
 prepared, stuffed, or mounted the 
 property or by any person who paid or 
 incurred the cost of such preparation, 
 stuffing, or mounting,
 the amount of gain which would have been long-
 term capital gain if the property contributed 
 had been sold by the taxpayer at its fair 
 market value (determined at the time of such 
 contribution).
 For purposes of applying this paragraph (other than in 
 the case of gain to which section 617(d)(1), 1245(a), 
 1250(a), 1252(a), or 1254(a) applies), property which 
 is property used in the trade or business (as defined 
 in section 1231(b)) shall be treated as a capital 
 asset. For purposes of applying this paragraph in the 
 case of a charitable contribution of stock in an S 
 corporation, rules similar to the rules of section 751 
 shall apply in determining whether gain on such stock 
 would have been long-term capital gain if such stock 
 were sold by the taxpayer.
 (2) Allocation of basis.--For purposes of paragraph 
 (1), in the case of a charitable contribution of less 
 than the taxpayer's entire interest in the property 
 contributed, the taxpayer's adjusted basis in such 
 property shall be allocated between the interest 
 contributed and any interest not contributed in 
 accordance with regulations prescribed by the 
 Secretary.
 (3) Special rule for certain contributions of 
 inventory and other property.--
 (A) Qualified contributions.--For purposes of 
 this paragraph, a qualified contribution shall 
 mean a charitable contribution of property 
 described in paragraph (1) or (2) of section 
 1221(a), by a corporation (other than a 
 corporation which is an S corporation) to an 
 organization which is described in section 
 501(c)(3) and is exempt under section 501(a) 
 (other than a private foundation, as defined in 
 section 509(a), which is not an operating 
 foundation, as defined in section 4942(j)(3)), 
 but only if--
 (i) the use of the property by the 
 donee is related to the purpose or 
 function constituting the basis for its 
 exemption under section 501 and the 
 property is to be used by the donee 
 solely for the care of the ill, the 
 needy, or infants;
 (ii) the property is not transferred 
 by the donee in exchange for money, 
 other property, or services;
 (iii) the taxpayer receives from the 
 donee a written statement representing 
 that its use and disposition of the 
 property will be in accordance with the 
 provisions of clauses (i) and (ii); and
 (iv) in the case where the property 
 is subject to regulation under the 
 Federal Food, Drug, and Cosmetic Act, 
 as amended, such property must fully 
 satisfy the applicable requirements of 
 such Act and regulations promulgated 
 thereunder on the date of transfer and 
 for one hundred and eighty days prior 
 thereto.
 (B) Amount of reduction.--The reduction under 
 paragraph (1)(A) for any qualified contribution 
 (as defined in subparagraph (A)) shall be no 
 greater than the sum of--
 (i) one-half of the amount computed 
 under paragraph (1)(A) (computed 
 without regard to this paragraph), and
 (ii) the amount (if any) by which the 
 charitable contribution deduction under 
 this section for any qualified 
 contribution (computed by taking into 
 account the amount determined in clause 
 (i), but without regard to this clause) 
 exceeds twice the basis of such 
 property.
 (C) Special rule for contributions of food 
 inventory.--
 (i) General rule.--In the case of a 
 charitable contribution of food from 
 any trade or business of the taxpayer, 
 this paragraph shall be applied--
 (I) without regard to whether 
 the contribution is made by a C 
 corporation, and
 (II) only to food that is 
 apparently wholesome food.
 (ii) Limitation.--The aggregate 
 amount of such contributions for any 
 taxable year which may be taken into 
 account under this section shall not 
 exceed--
 (I) in the case of any 
 taxpayer other than a C 
 corporation, 15 percent of the 
 taxpayer's aggregate net income 
 for such taxable year from all 
 trades or businesses from which 
 such contributions were made 
 for such year, computed without 
 regard to this section, and
 (II) in the case of a C 
 corporation, 15 percent of 
 taxable income (as defined in 
 subsection (b)(2)(D)).
 (iii) Rules related to limitation.--
 (I) Carryover.--If such 
 aggregate amount exceeds the 
 limitation imposed under clause 
 (ii), such excess shall be 
 treated (in a manner consistent 
 with the rules of subsection 
 (d)) as a charitable 
 contribution described in 
 clause (i) in each of the 5 
 succeeding taxable years in 
 order of time.
 (II) Coordination with 
 overall corporate limitation.--
 In the case of any charitable 
 contribution which is allowable 
 after the application of clause 
 (ii)(II), subsection (b)(2)(A) 
 shall not apply to such 
 contribution, but the 
 limitation imposed by such 
 subsection shall be reduced 
 (but not below zero) by the 
 aggregate amount of such 
 contributions. For purposes of 
 subsection (b)(2)(B), such 
 contributions shall be treated 
 as allowable under subsection 
 (b)(2)(A).
 (iv) Determination of basis for 
 certain taxpayers.--If a taxpayer--
 (I) does not account for 
 inventories under section 471, 
 and
 (II) is not required to 
 capitalize indirect costs under 
 section 263A,
 the taxpayer may elect, solely for purposes of 
 subparagraph (B), to treat the basis of any 
 apparently wholesome food as being equal to 25 
 percent of the fair market value of such food.
 (v) Determination of fair market 
 value.--In the case of any such 
 contribution of apparently wholesome 
 food which cannot or will not be sold 
 solely by reason of internal standards 
 of the taxpayer, lack of market, or 
 similar circumstances, or by reason of 
 being produced by the taxpayer 
 exclusively for the purposes of 
 transferring the food to an 
 organization described in subparagraph 
 (A), the fair market value of such 
 contribution shall be determined--
 (I) without regard to such 
 internal standards, such lack 
 of market, such circumstances, 
 or such exclusive purpose, and
 (II) by taking into account 
 the price at which the same or 
 substantially the same food 
 items (as to both type and 
 quality) are sold by the 
 taxpayer at the time of the 
 contribution (or, if not so 
 sold at such time, in the 
 recent past).
 (vi) Apparently wholesome food.--For 
 purposes of this subparagraph, the term 
 ``apparently wholesome food'' has the 
 meaning given to such term by section 
 22(b)(2) of the Bill Emerson Good 
 Samaritan Food Donation Act (42 U.S.C. 
 1791(b)(2)), as in effect on the date 
 of the enactment of this subparagraph.
 (D) This paragraph shall not apply to so much 
 of the amount of the gain described in 
 paragraph (1)(A) which would be long-term 
 capital gain but for the application of 
 sections 617, 1245, 1250, or 1252.
 (4) Special rule for contributions of scientific 
 property used for research.--
 (A) Limit on reduction.--In the case of a 
 qualified research contribution, the reduction 
 under paragraph (1)(A) shall be no greater than 
 the amount determined under paragraph (3)(B).
 (B) Qualified research contributions.--For 
 purposes of this paragraph, the term 
 ``qualified research contribution'' means a 
 charitable contribution by a corporation of 
 tangible personal property described in 
 paragraph (1) of section 1221(a), but only if--
 (i) the contribution is to an 
 organization described in subparagraph 
 (A) or subparagraph (B) of section 
 41(e)(6),
 (ii) the property is constructed or 
 assembled by the taxpayer,
 (iii) the contribution is made not 
 later than 2 years after the date the 
 construction or assembly of the 
 property is substantially completed,
 (iv) the original use of the property 
 is by the donee,
 (v) the property is scientific 
 equipment or apparatus substantially 
 all of the use of which by the donee is 
 for research or experimentation (within 
 the meaning of section 174), or for 
 research training, in the United States 
 in physical or biological sciences,
 (vi) the property is not transferred 
 by the donee in exchange for money, 
 other property, or services, and
 (vii) the taxpayer receives from the 
 donee a written statement representing 
 that its use and disposition of the 
 property will be in accordance with the 
 provisions of clauses (v) and (vi).
 (C) Construction of property by taxpayer.--
 For purposes of this paragraph, property shall 
 be treated as constructed by the taxpayer only 
 if the cost of the parts used in the 
 construction of such property (other than parts 
 manufactured by the taxpayer or a related 
 person) do not exceed 50 percent of the 
 taxpayer's basis in such property.
 (D) Corporation.--For purposes of this 
 paragraph, the term ``corporation'' shall not 
 include--
 (i) an S corporation,
 (ii) a personal holding company (as 
 defined in section 542), and
 (iii) a service organization (as 
 defined in section 414(m)(3)).
 (5) Special rule for contributions of stock for which 
 market quotations are readily available.--
 (A) In general.--Subparagraph (B)(ii) of 
 paragraph (1) shall not apply to any 
 contribution of qualified appreciated stock.
 (B) Qualified appreciated stock.--Except as 
 provided in subparagraph (C), for purposes of 
 this paragraph, the term ``qualified 
 appreciated stock'' means any stock of a 
 corporation--
 (i) for which (as of the date of the 
 contribution) market quotations are 
 readily available on an established 
 securities market, and
 (ii) which is capital gain property 
 (as defined in subsection 
 (b)(1)(C)(iv)).
 (C) Donor may not contribute more than 10 
 percent of stock of corporation.--
 (i) In general.--In the case of any 
 donor, the term ``qualified appreciated 
 stock'' shall not include any stock of 
 a corporation contributed by the donor 
 in a contribution to which paragraph 
 (1)(B)(ii) applies (determined without 
 regard to this paragraph) to the extent 
 that the amount of the stock so 
 contributed (when increased by the 
 aggregate amount of all prior such 
 contributions by the donor of stock in 
 such corporation) exceeds 10 percent 
 (in value) of all of the outstanding 
 stock of such corporation.
 (ii) Special rule.--For purposes of 
 clause (i), an individual shall be 
 treated as making all contributions 
 made by any member of his family (as 
 defined in section 267(c)(4)).
 [(6) Repealed. Pub. L. 113-295, div. A, title II, 
 Sec. 221(a)(28)(B), Dec. 19, 2014, 128 Stat. 4041].--
 (7) Recapture of deduction on certain dispositions of 
 exempt use property.--
 (A) In general.--In the case of an applicable 
 disposition of applicable property, there shall 
 be included in the income of the donor of such 
 property for the taxable year of such donor in 
 which the applicable disposition occurs an 
 amount equal to the excess (if any) of--
 (i) the amount of the deduction 
 allowed to the donor under this section 
 with respect to such property, over
 (ii) the donor's basis in such 
 property at the time such property was 
 contributed.
 (B) Applicable disposition.--For purposes of 
 this paragraph, the term ``applicable 
 disposition'' means any sale, exchange, or 
 other disposition by the donee of applicable 
 property--
 (i) after the last day of the taxable 
 year of the donor in which such 
 property was contributed, and
 (ii) before the last day of the 3-
 year period beginning on the date of 
 the contribution of such property,
 unless the donee makes a certification in 
 accordance with subparagraph (D).
 (C) Applicable property.--For purposes of 
 this paragraph, the term ``applicable 
 property'' means charitable deduction property 
 (as defined in section 6050L(a)(2)(A))--
 (i) which is tangible personal 
 property the use of which is identified 
 by the donee as related to the purpose 
 or function constituting the basis of 
 the donee's exemption under section 
 501, and
 (ii) for which a deduction in excess 
 of the donor's basis is allowed.
 (D) Certification.--A certification meets the 
 requirements of this subparagraph if it is a 
 written statement which is signed under penalty 
 of perjury by an officer of the donee 
 organization and--
 (i) which--
 (I) certifies that the use of 
 the property by the donee was 
 substantial and related to the 
 purpose or function 
 constituting the basis for the 
 donee's exemption under section 
 501, and
 (II) describes how the 
 property was used and how such 
 use furthered such purpose or 
 function, or
 (ii) which--
 (I) states the intended use 
 of the property by the donee at 
 the time of the contribution, 
 and
 (II) certifies that such 
 intended use has become 
 impossible or infeasible to 
 implement.
 (f) Disallowance of deduction in certain cases and special 
rules.--
 (1) In general.--No deduction shall be allowed under 
 this section for a contribution to or for the use of an 
 organization or trust described in section 508(d) or 
 4948(c)(4) subject to the conditions specified in such 
 sections.
 (2) Contributions of property placed in trust.--
 (A) Remainder interest.--In the case of 
 property transferred in trust, no deduction 
 shall be allowed under this section for the 
 value of a contribution of a remainder interest 
 unless the trust is a charitable remainder 
 annuity trust or a charitable remainder 
 unitrust (described in section 664), or a 
 pooled income fund (described in section 
 642(c)(5)).
 (B) Income interests, etc..--No deduction 
 shall be allowed under this section for the 
 value of any interest in property (other than a 
 remainder interest) transferred in trust unless 
 the interest is in the form of a guaranteed 
 annuity or the trust instrument specifies that 
 the interest is a fixed percentage distributed 
 yearly of the fair market value of the trust 
 property (to be determined yearly) and the 
 grantor is treated as the owner of such 
 interest for purposes of applying section 671. 
 If the donor ceases to be treated as the owner 
 of such an interest for purposes of applying 
 section 671, at the time the donor ceases to be 
 so treated, the donor shall for purposes of 
 this chapter be considered as having received 
 an amount of income equal to the amount of any 
 deduction he received under this section for 
 the contribution reduced by the discounted 
 value of all amounts of income earned by the 
 trust and taxable to him before the time at 
 which he ceases to be treated as the owner of 
 the interest. Such amounts of income shall be 
 discounted to the date of the contribution. The 
 Secretary shall prescribe such regulations as 
 may be necessary to carry out the purposes of 
 this subparagraph.
 (C) Denial of deduction in case of payments 
 by certain trusts.--In any case in which a 
 deduction is allowed under this section for the 
 value of an interest in property described in 
 subparagraph (B), transferred in trust, no 
 deduction shall be allowed under this section 
 to the grantor or any other person for the 
 amount of any contribution made by the trust 
 with respect to such interest.
 (D) Exception.--This paragraph shall not 
 apply in a case in which the value of all 
 interests in property transferred in trust are 
 deductible under subsection (a).
 (3) Denial of deduction in case of certain 
 contributions of partial interests in property.--
 (A) In general.--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.
 (B) Exceptions.--Subparagraph (A) shall not 
 apply to--
 (i) a contribution of a remainder 
 interest in a personal residence or 
 farm,
 (ii) a contribution of an undivided 
 portion of the taxpayer's entire 
 interest in property, and
 (iii) a qualified conservation 
 contribution.
 (4) Valuation of remainder interest in real 
 property.--For purposes of this section, in determining 
 the value of a remainder interest in real property, 
 depreciation (computed on the straight line method) and 
 depletion of such property shall be taken into account, 
 and such value shall be discounted at a rate of 6 
 percent per annum, except that the Secretary may 
 prescribe a different rate.
 (5) Reduction for certain interest.--If, in 
 connection with any charitable contribution, a 
 liability is assumed by the recipient or by any other 
 person, or if a charitable contribution is of property 
 which is subject to a liability, then, to the extent 
 necessary to avoid the duplication of amounts, the 
 amount taken into account for purposes of this section 
 as the amount of the charitable contribution--
 (A) shall be reduced for interest (i) which 
 has been paid (or is to be paid) by the 
 taxpayer, (ii) which is attributable to the 
 liability, and (iii) which is attributable to 
 any period after the making of the 
 contribution, and
 (B) in the case of a bond, shall be further 
 reduced for interest (i) which has been paid 
 (or is to be paid) by the taxpayer on 
 indebtedness incurred or continued to purchase 
 or carry such bond, and (ii) which is 
 attributable to any period before the making of 
 the contribution.
 The reduction pursuant to subparagraph (B) shall not 
 exceed the interest (including interest equivalent) on 
 the bond which is attributable to any period before the 
 making of the contribution and which is not (under the 
 taxpayer's method of accounting) includible in the 
 gross income of the taxpayer for any taxable year. For 
 purposes of this paragraph, the term ``bond'' means any 
 bond, debenture, note, or certificate or other evidence 
 of indebtedness.
 (6) Deductions for out-of-pocket expenditures.--No 
 deduction shall be allowed under this section for an 
 out-of-pocket expenditure made by any person on behalf 
 of an organization described in subsection (c) (other 
 than an organization described in section 501(h)(5) 
 (relating to churches, etc.)) if the expenditure is 
 made for the purpose of influencing legislation (within 
 the meaning of section 501(c)(3)).
 (7) Reformations to comply with paragraph (2).--
 (A) In general.--A deduction shall be allowed 
 under subsection (a) in respect of any 
 qualified reformation (within the meaning of 
 section 2055(e)(3)(B)).
 (B) Rules similar to section 2055(e)(3) to 
 apply.--For purposes of this paragraph, rules 
 similar to the rules of section 2055(e)(3) 
 shall apply.
 (8) Substantiation requirement for certain 
 contributions.--
 (A) General rule.--No deduction shall be 
 allowed under subsection (a) for any 
 contribution of $250 or more unless the 
 taxpayer substantiates the contribution by a 
 contemporaneous written acknowledgment of the 
 contribution by the donee organization that 
 meets the requirements of subparagraph (B).
 (B) Content of acknowledgement.--An 
 acknowledgement meets the requirements of this 
 subparagraph if it includes the following 
 information:
 (i) The amount of cash and a 
 description (but not value) of any 
 property other than cash contributed.
 (ii) Whether the donee organization 
 provided any goods or services in 
 consideration, in whole or in part, for 
 any property described in clause (i).
 (iii) A description and good faith 
 estimate of the value of any goods or 
 services referred to in clause (ii) or, 
 if such goods or services consist 
 solely of intangible religious 
 benefits, a statement to that effect.
 For purposes of this subparagraph, the term 
 ``intangible religious benefit'' means any 
 intangible religious benefit which is provided 
 by an organization organized exclusively for 
 religious purposes and which generally is not 
 sold in a commercial transaction outside the 
 donative context.
 (C) Contemporaneous.--For purposes of 
 subparagraph (A), an acknowledgment shall be 
 considered to be contemporaneous if the 
 taxpayer obtains the acknowledgment on or 
 before the earlier of--
 (i) the date on which the taxpayer 
 files a return for the taxable year in 
 which the contribution was made, or
 (ii) the due date (including 
 extensions) for filing such return.
 (D) Regulations.--The Secretary shall 
 prescribe such regulations as may be necessary 
 or appropriate to carry out the purposes of 
 this paragraph, including regulations that may 
 provide that some or all of the requirements of 
 this paragraph do not apply in appropriate 
 cases.
 (9) Denial of deduction where contribution for 
 lobbying activities.--No deduction shall be allowed 
 under this section for a contribution to an 
 organization which conducts activities to which section 
 162(e)(1) applies on matters of direct financial 
 interest to the donor's trade or business, if a 
 principal purpose of the contribution was to avoid 
 Federal income tax by securing a deduction for such 
 activities under this section which would be disallowed 
 by reason of section 162(e) if the donor had conducted 
 such activities directly. No deduction shall be allowed 
 under section 162(a) for any amount for which a 
 deduction is disallowed under the preceding sentence.
 (10) Split-dollar life insurance, annuity, and 
 endowment contracts.--
 (A) In general.--Nothing in this section or 
 in section 545(b)(2), 642(c), 2055, 2106(a)(2), 
 or 2522 shall be construed to allow a 
 deduction, and no deduction shall be allowed, 
 for any transfer to or for the use of an 
 organization described in subsection (c) if in 
 connection with such transfer--
 (i) the organization directly or 
 indirectly pays, or has previously 
 paid, any premium on any personal 
 benefit contract with respect to the 
 transferor, or
 (ii) there is an understanding or 
 expectation that any person will 
 directly or indirectly pay any premium 
 on any personal benefit contract with 
 respect to the transferor.
 (B) Personal benefit contract.--For purposes 
 of subparagraph (A), the term ``personal 
 benefit contract'' means, with respect to the 
 transferor, any life insurance, annuity, or 
 endowment contract if any direct or indirect 
 beneficiary under such contract is the 
 transferor, any member of the transferor's 
 family, or any other person (other than an 
 organization described in subsection (c)) 
 designated by the transferor.
 (C) Application to charitable remainder 
 trusts.--In the case of a transfer to a trust 
 referred to in subparagraph (E), references in 
 subparagraphs (A) and (F) to an organization 
 described in subsection (c) shall be treated as 
 a reference to such trust.
 (D) Exception for certain annuity 
 contracts.--If, in connection with a transfer 
 to or for the use of an organization described 
 in subsection (c), such organization incurs an 
 obligation to pay a charitable gift annuity (as 
 defined in section 501(m)) and such 
 organization purchases any annuity contract to 
 fund such obligation, persons receiving 
 payments under the charitable gift annuity 
 shall not be treated for purposes of 
 subparagraph (B) as indirect beneficiaries 
 under such contract if--
 (i) such organization possesses all 
 of the incidents of ownership under 
 such contract,
 (ii) such organization is entitled to 
 all the payments under such contract, 
 and
 (iii) the timing and amount of 
 payments under such contract are 
 substantially the same as the timing 
 and amount of payments to each such 
 person under such obligation (as such 
 obligation is in effect at the time of 
 such transfer).
 (E) Exception for certain contracts held by 
 charitable remainder trusts.--A person shall 
 not be treated for purposes of subparagraph (B) 
 as an indirect beneficiary under any life 
 insurance, annuity, or endowment contract held 
 by a charitable remainder annuity trust or a 
 charitable remainder unitrust (as defined in 
 section 664(d)) solely by reason of being 
 entitled to any payment referred to in 
 paragraph (1)(A) or (2)(A) of section 664(d) 
 if--
 (i) such trust possesses all of the 
 incidents of ownership under such 
 contract, and
 (ii) such trust is entitled to all 
 the payments under such contract.
 (F) Excise tax on premiums paid.--
 (i) In general.--There is hereby 
 imposed on any organization described 
 in subsection (c) an excise tax equal 
 to the premiums paid by such 
 organization on any life insurance, 
 annuity, or endowment contract if the 
 payment of premiums on such contract is 
 in connection with a transfer for which 
 a deduction is not allowable under 
 subparagraph (A), determined without 
 regard to when such transfer is made.
 (ii) Payments by other persons.--For 
 purposes of clause (i), payments made 
 by any other person pursuant to an 
 understanding or expectation referred 
 to in subparagraph (A) shall be treated 
 as made by the organization.
 (iii) Reporting.--Any organization on 
 which tax is imposed by clause (i) with 
 respect to any premium shall file an 
 annual return which includes--
 (I) the amount of such 
 premiums paid during the year 
 and the name and TIN of each 
 beneficiary under the contract 
 to which the premium relates, 
 and
 (II) such other information 
 as the Secretary may require.
 The penalties applicable to returns required 
 under section 6033 shall apply to returns 
 required under this clause. Returns required 
 under this clause shall be furnished at such 
 time and in such manner as the Secretary shall 
 by forms or regulations require.
 (iv) Certain rules to apply.--The tax 
 imposed by this subparagraph shall be 
 treated as imposed by chapter 42 for 
 purposes of this title other than 
 subchapter B of chapter 42.
 (G) Special rule where State requires 
 specification of charitable gift annuitant in 
 contract.--In the case of an obligation to pay 
 a charitable gift annuity referred to in 
 subparagraph (D) which is entered into under 
 the laws of a State which requires, in order 
 for the charitable gift annuity to be exempt 
 from insurance regulation by such State, that 
 each beneficiary under the charitable gift 
 annuity be named as a beneficiary under an 
 annuity contract issued by an insurance company 
 authorized to transact business in such State, 
 the requirements of clauses (i) and (ii) of 
 subparagraph (D) shall be treated as met if--
 (i) such State law requirement was in 
 effect on February 8, 1999,
 (ii) each such beneficiary under the 
 charitable gift annuity is a bona fide 
 resident of such State at the time the 
 obligation to pay a charitable gift 
 annuity is entered into, and
 (iii) the only persons entitled to 
 payments under such contract are 
 persons entitled to payments as 
 beneficiaries under such obligation on 
 the date such obligation is entered 
 into.
 (H) Member of family.--For purposes of this 
 paragraph, an individual's family consists of 
 the individual's grandparents, the grandparents 
 of such individual's spouse, the lineal 
 descendants of such grandparents, and any 
 spouse of such a lineal descendant.
 (I) Regulations.--The Secretary shall 
 prescribe such regulations as may be necessary 
 or appropriate to carry out the purposes of 
 this paragraph, including regulations to 
 prevent the avoidance of such purposes.
 (11) Qualified appraisal and other documentation for 
 certain contributions.--
 (A) In general.--
 (i) Denial of deduction.--In the case 
 of an individual, partnership, or 
 corporation, no deduction shall be 
 allowed under subsection (a) for any 
 contribution of property for which a 
 deduction of more than $500 is claimed 
 unless such person meets the 
 requirements of subparagraphs (B), (C), 
 and (D), as the case may be, with 
 respect to such contribution.
 (ii) Exceptions.--
 (I) Readily valued 
 property.--Subparagraphs (C) 
 and (D) shall not apply to 
 cash, property described in 
 subsection (e)(1)(B)(iii) or 
 section 1221(a)(1), publicly 
 traded securities (as defined 
 in section 6050L(a)(2)(B)), and 
 any qualified vehicle described 
 in paragraph (12)(A)(ii) for 
 which an acknowledgement under 
 paragraph (12)(B)(iii) is 
 provided.
 (II) Reasonable cause.--
 Clause (i) shall not apply if 
 it is shown that the failure to 
 meet such requirements is due 
 to reasonable cause and not to 
 willful neglect.
 (B) Property description for contributions of 
 more than $500.--In the case of contributions 
 of property for which a deduction of more than 
 $500 is claimed, the requirements of this 
 subparagraph are met if the individual, 
 partnership or corporation includes with the 
 return for the taxable year in which the 
 contribution is made a description of such 
 property and such other information as the 
 Secretary may require. The requirements of this 
 subparagraph shall not apply to a C corporation 
 which is not a personal service corporation or 
 a closely held C corporation.
 (C) Qualified appraisal for contributions of 
 more than $5,000.--In the case of contributions 
 of property for which a deduction of more than 
 $5,000 is claimed, the requirements of this 
 subparagraph are met if the individual, 
 partnership, or corporation obtains a qualified 
 appraisal of such property and attaches to the 
 return for the taxable year in which such 
 contribution is made such information regarding 
 such property and such appraisal as the 
 Secretary may require.
 (D) Substantiation for contributions of more 
 than $500,000.--In the case of contributions of 
 property for which a deduction of more than 
 $500,000 is claimed, the requirements of this 
 subparagraph are met if the individual, 
 partnership, or corporation attaches to the 
 return for the taxable year a qualified 
 appraisal of such property.
 (E) Qualified appraisal and appraiser.--For 
 purposes of this paragraph--
 (i) Qualified appraisal.--The term 
 ``qualified appraisal'' means, with 
 respect to any property, an appraisal 
 of such property which--
 (I) is treated for purposes 
 of this paragraph as a 
 qualified appraisal under 
 regulations or other guidance 
 prescribed by the Secretary, 
 and
 (II) is conducted by a 
 qualified appraiser in 
 accordance with generally 
 accepted appraisal standards 
 and any regulations or other 
 guidance prescribed under 
 subclause (I).
 (ii) Qualified appraiser.--Except as 
 provided in clause (iii), the term 
 ``qualified appraiser'' means an 
 individual who--
 (I) has earned an appraisal 
 designation from a recognized 
 professional appraiser 
 organization or has otherwise 
 met minimum education and 
 experience requirements set 
 forth in regulations prescribed 
 by the Secretary,
 (II) regularly performs 
 appraisals for which the 
 individual receives 
 compensation, and
 (III) meets such other 
 requirements as may be 
 prescribed by the Secretary in 
 regulations or other guidance.
 (iii) Specific appraisals.--An 
 individual shall not be treated as a 
 qualified appraiser with respect to any 
 specific appraisal unless--
 (I) the individual 
 demonstrates verifiable 
 education and experience in 
 valuing the type of property 
 subject to the appraisal, and
 (II) the individual has not 
 been prohibited from practicing 
 before the Internal Revenue 
 Service by the Secretary under 
 section 330(c) of title 31, 
 United States Code, at any time 
 during the 3-year period ending 
 on the date of the appraisal.
 (F) Aggregation of similar items of 
 property.--For purposes of determining 
 thresholds under this paragraph, property and 
 all similar items of property donated to 1 or 
 more donees shall be treated as 1 property.
 (G) Special rule for pass-thru entities.--In 
 the case of a partnership or S corporation, 
 this paragraph shall be applied at the entity 
 level, except that the deduction shall be 
 denied at the partner or shareholder level.
 (H) Regulations.--The Secretary may prescribe 
 such regulations as may be necessary or 
 appropriate to carry out the purposes of this 
 paragraph, including regulations that may 
 provide that some or all of the requirements of 
 this paragraph do not apply in appropriate 
 cases.
 (12) Contributions of used motor vehicles, boats, and 
 airplanes.--
 (A) In general.--In the case of a 
 contribution of a qualified vehicle the claimed 
 value of which exceeds $500--
 (i) paragraph (8) shall not apply and 
 no deduction shall be allowed under 
 subsection (a) for such contribution 
 unless the taxpayer substantiates the 
 contribution by a contemporaneous 
 written acknowledgement of the 
 contribution by the donee organization 
 that meets the requirements of 
 subparagraph (B) and includes the 
 acknowledgement with the taxpayer's 
 return of tax which includes the 
 deduction, and
 (ii) if the organization sells the 
 vehicle without any significant 
 intervening use or material improvement 
 of such vehicle by the organization, 
 the amount of the deduction allowed 
 under subsection (a) shall not exceed 
 the gross proceeds received from such 
 sale.
 (B) Content of acknowledgement.--An 
 acknowledgement meets the requirements of this 
 subparagraph if it includes the following 
 information:
 (i) The name and taxpayer 
 identification number of the donor.
 (ii) The vehicle identification 
 number or similar number.
 (iii) In the case of a qualified 
 vehicle to which subparagraph (A)(ii) 
 applies--
 (I) a certification that the 
 vehicle was sold in an arm's 
 length transaction between 
 unrelated parties,
 (II) the gross proceeds from 
 the sale, and
 (III) a statement that the 
 deductible amount may not 
 exceed the amount of such gross 
 proceeds.
 (iv) In the case of a qualified 
 vehicle to which subparagraph (A)(ii) 
 does not apply--
 (I) a certification of the 
 intended use or material 
 improvement of the vehicle and 
 the intended duration of such 
 use, and
 (II) a certification that the 
 vehicle would not be 
 transferred in exchange for 
 money, other property, or 
 services before completion of 
 such use or improvement.
 (v) Whether the donee organization 
 provided any goods or services in 
 consideration, in whole or in part, for 
 the qualified vehicle.
 (vi) A description and good faith 
 estimate of the value of any goods or 
 services referred to in clause (v) or, 
 if such goods or services consist 
 solely of intangible religious benefits 
 (as defined in paragraph (8)(B)), a 
 statement to that effect.
 (C) Contemporaneous.--For purposes of 
 subparagraph (A), an acknowledgement shall be 
 considered to be contemporaneous if the donee 
 organization provides it within 30 days of--
 (i) the sale of the qualified 
 vehicle, or
 (ii) in the case of an 
 acknowledgement including a 
 certification described in subparagraph 
 (B)(iv), the contribution of the 
 qualified vehicle.
 (D) Information to Secretary.--A donee 
 organization required to provide an 
 acknowledgement under this paragraph shall 
 provide to the Secretary the information 
 contained in the acknowledgement. Such 
 information shall be provided at such time and 
 in such manner as the Secretary may prescribe.
 (E) Qualified vehicle.--For purposes of this 
 paragraph, the term ``qualified vehicle'' means 
 any--
 (i) motor vehicle manufactured 
 primarily for use on public streets, 
 roads, and highways,
 (ii) boat, or
 (iii) airplane.
 Such term shall not include any property which 
 is described in section 1221(a)(1).
 (F) Regulations or other guidance.--The 
 Secretary shall prescribe such regulations or 
 other guidance as may be necessary to carry out 
 the purposes of this paragraph. The Secretary 
 may prescribe regulations or other guidance 
 which exempts sales by the donee organization 
 which are in direct furtherance of such 
 organization's charitable purpose from the 
 requirements of subparagraphs (A)(ii) and 
 (B)(iv)(II).
 (13) Contributions of certain interests in buildings 
 located in registered historic districts.--
 (A) In general.--No deduction shall be 
 allowed with respect to any contribution 
 described in subparagraph (B) unless the 
 taxpayer includes with the return for the 
 taxable year of the contribution a $500 filing 
 fee.
 (B) Contribution described.--A contribution 
 is described in this subparagraph if such 
 contribution is a qualified conservation 
 contribution (as defined in subsection (h)) 
 which is a restriction with respect to the 
 exterior of a building described in subsection 
 (h)(4)(C)(ii) and for which a deduction is 
 claimed in excess of $10,000.
 (C) Dedication of fee.--Any fee collected 
 under this paragraph shall be used for the 
 enforcement of the provisions of subsection 
 (h).
 (14) Reduction for amounts attributable to 
 rehabilitation credit.--In the case of any qualified 
 conservation contribution (as defined in subsection 
 (h)), the amount of the deduction allowed under this 
 section shall be reduced by an amount which bears the 
 same ratio to the fair market value of the contribution 
 as--
 (A) the sum of the credits allowed to the 
 taxpayer under section 47 for the 5 preceding 
 taxable years with respect to any building 
 which is a part of such contribution, bears to
 (B) the fair market value of the building on 
 the date of the contribution.
 (15) Special rule for taxidermy property.--
 (A) Basis.--For purposes of this section and 
 notwithstanding section 1012, in the case of a 
 charitable contribution of taxidermy property 
 which is made by the person who prepared, 
 stuffed, or mounted the property or by any 
 person who paid or incurred the cost of such 
 preparation, stuffing, or mounting, only the 
 cost of the preparing, stuffing, or mounting 
 shall be included in the basis of such 
 property.
 (B) Taxidermy property.--For purposes of this 
 section, the term ``taxidermy property'' means 
 any work of art which--
 (i) is the reproduction or 
 preservation of an animal, in whole or 
 in part,
 (ii) is prepared, stuffed, or mounted 
 for purposes of recreating one or more 
 characteristics of such animal, and
 (iii) contains a part of the body of 
 the dead animal.
 (16) Contributions of clothing and household items.--
 (A) In general.--In the case of an 
 individual, partnership, or corporation, no 
 deduction shall be allowed under subsection (a) 
 for any contribution of clothing or a household 
 item unless such clothing or household item is 
 in good used condition or better.
 (B) Items of minimal value.--Notwithstanding 
 subparagraph (A), the Secretary may by 
 regulation deny a deduction under subsection 
 (a) for any contribution of clothing or a 
 household item which has minimal monetary 
 value.
 (C) Exception for certain property.--
 Subparagraphs (A) and (B) shall not apply to 
 any contribution of a single item of clothing 
 or a household item for which a deduction of 
 more than $500 is claimed if the taxpayer 
 includes with the taxpayer's return a qualified 
 appraisal with respect to the property.
 (D) Household items.--For purposes of this 
 paragraph--
 (i) In general.--The term ``household 
 items'' includes furniture, 
 furnishings, electronics, appliances, 
 linens, and other similar items.
 (ii) Excluded items.--Such term does 
 not include--
 (I) food,
 (II) paintings, antiques, and 
 other objects of art,
 (III) jewelry and gems, and
 (IV) collections.
 (E) Special rule for pass-thru entities.--In 
 the case of a partnership or S corporation, 
 this paragraph shall be applied at the entity 
 level, except that the deduction shall be 
 denied at the partner or shareholder level.
 (17) Recordkeeping.--No deduction shall be allowed 
 under subsection (a) for any contribution of a cash, 
 check, or other monetary gift unless the donor 
 maintains as a record of such contribution a bank 
 record or a written communication from the donee 
 showing the name of the donee organization, the date of 
 the contribution, and the amount of the contribution.
 (18) Contributions to donor advised funds.--A 
 deduction otherwise allowed under subsection (a) for 
 any contribution to a donor advised fund (as defined in 
 section 4966(d)(2)) shall only be allowed if--
 (A) the sponsoring organization (as defined 
 in section 4966(d)(1)) with respect to such 
 donor advised fund is not--
 (i) described in paragraph (3), (4), 
 or (5) of subsection (c), or
 (ii) a type III supporting 
 organization (as defined in section 
 4943(f)(5)(A)) which is not a 
 functionally integrated type III 
 supporting organization (as defined in 
 section 4943(f)(5)(B)), and
 (B) the taxpayer obtains a contemporaneous 
 written acknowledgment (determined under rules 
 similar to the rules of paragraph (8)(C)) from 
 the sponsoring organization (as so defined) of 
 such donor advised fund that such organization 
 has exclusive legal control over the assets 
 contributed.
 (19) Certain qualified conservation contributions.--
 (A) In general.--In the case of a qualified 
 conservation contribution to which this paragraph 
 applies, no deduction shall be allowed under subsection 
 (a) for such contribution unless the partnership making 
 such contribution--
 (i) includes on its return for the taxable 
 year in which the contribution is made a 
 statement that the partnership made such a 
 contribution, and
 (ii) provides such information about the 
 contribution as the Secretary may require.
 (B) Contributions to which this paragraph applies.--
 This paragraph shall apply to any qualified 
 conservation contribution--
 (i) the conservation purpose of which is the 
 preservation of any building which is a 
 certified historic structure (as defined in 
 subsection (h)(4)(C)),
 (ii) which is made by a partnership (whether 
 directly or as a distributive share of a 
 contribution of another partnership), and
 (iii) the amount of which exceeds 2.5 times 
 the sum of each partner's relevant basis (as 
 defined in subsection (h)(7)) in the 
 partnership making the contribution.
 (C) Application to other pass-through entities.--
 Except as may be otherwise provided by the Secretary, 
 the rules of this paragraph shall apply to S 
 corporations and other pass-through entities in the 
 same manner as such rules apply to partnerships.
 (g) Amounts paid to maintain certain students as members of 
taxpayer's household.--
 (1) In general.--Subject to the limitations provided 
 by paragraph (2), amounts paid by the taxpayer to 
 maintain an individual (other than a dependent, as 
 defined in section 152 (determined without regard to 
 subsections (b)(1), (b)(2), and (d)(1)(B) thereof), or 
 a relative of the taxpayer) as a member of his 
 household during the period that such individual is--
 (A) a member of the taxpayer's household 
 under a written agreement between the taxpayer 
 and an organization described in paragraph (2), 
 (3), or (4) of subsection (c) to implement a 
 program of the organization to provide 
 educational opportunities for pupils or 
 students in private homes, and
 (B) a full-time pupil or student in the 
 twelfth or any lower grade at an educational 
 organization described in section 
 170(b)(1)(A)(ii) located in the United States,
 shall be treated as amounts paid for the use of the 
 organization.
 (2) Limitations.--
 (A) Amount.--Paragraph (1) shall apply to 
 amounts paid within the taxable year only to 
 the extent that such amounts do not exceed $50 
 multiplied by the number of full calendar 
 months during the taxable year which fall 
 within the period described in paragraph (1). 
 For purposes of the preceding sentence, if 15 
 or more days of a calendar month fall within 
 such period such month shall be considered as a 
 full calendar month.
 (B) Compensation or reimbursement.--Paragraph 
 (1) shall not apply to any amount paid by the 
 taxpayer within the taxable year if the 
 taxpayer receives any money or other property 
 as compensation or reimbursement for 
 maintaining the individual in his household 
 during the period described in paragraph (1).
 (3) Relative defined.--For purposes of paragraph (1), 
 the term ``relative of the taxpayer'' means an 
 individual who, with respect to the taxpayer, bears any 
 of the relationships described in subparagraphs (A) 
 through (G) of section 152(d)(2).
 (4) No other amount allowed as deduction.--No 
 deduction shall be allowed under subsection (a) for any 
 amount paid by a taxpayer to maintain an individual as 
 a member of his household under a program described in 
 paragraph (1)(A) except as provided in this subsection.
 (h) Qualified conservation contribution.--
 (1) In general.--For purposes of subsection 
 (f)(3)(B)(iii), the term ``qualified conservation 
 contribution'' means a contribution--
 (A) of a qualified real property interest,
 (B) to a qualified organization,
 (C) exclusively for conservation purposes.
 (2) Qualified real property interest.--For purposes 
 of this subsection, the term ``qualified real property 
 interest'' means any of the following interests in real 
 property:
 (A) the entire interest of the donor other 
 than a qualified mineral interest,
 (B) a remainder interest, and
 (C) a restriction (granted in perpetuity) on 
 the use which may be made of the real property.
 (3) Qualified organization.--For purposes of 
 paragraph (1), the term ``qualified organization'' 
 means an organization which--
 (A) is described in clause (v) or (vi) of 
 subsection (b)(1)(A), or
 (B) is described in section 501(c)(3) and--
 (i) meets the requirements of section 
 509(a)(2), or
 (ii) meets the requirements of 
 section 509(a)(3) and is controlled by 
 an organization described in 
 subparagraph (A) or in clause (i) of 
 this subparagraph.
 (4) Conservation purpose defined.--
 (A) In general.--For purposes of this 
 subsection, the term ``conservation purpose'' 
 means--
 (i) the preservation of land areas 
 for outdoor recreation by, or the 
 education of, the general public,
 (ii) the protection of a relatively 
 natural habitat of fish, wildlife, or 
 plants, or similar ecosystem,
 (iii) the preservation of open space 
 (including farmland and forest land) 
 where such preservation is--
 (I) for the scenic enjoyment 
 of the general public, or
 (II) pursuant to a clearly 
 delineated Federal, State, or 
 local governmental conservation 
 policy,
 and will yield a significant public benefit, 
 or
 (iv) the preservation of an 
 historically important land area or a 
 certified historic structure.
 (B) Special rules with respect to buildings 
 in registered historic districts.--In the case 
 of any contribution of a qualified real 
 property interest which is a restriction with 
 respect to the exterior of a building described 
 in subparagraph (C)(ii), such contribution 
 shall not be considered to be exclusively for 
 conservation purposes unless--
 (i) such interest--
 (I) includes a restriction 
 which preserves the entire 
 exterior of the building 
 (including the front, sides, 
 rear, and height of the 
 building), and
 (II) prohibits any change in 
 the exterior of the building 
 which is inconsistent with the 
 historical character of such 
 exterior,
 (ii) the donor and donee enter into a 
 written agreement certifying, under 
 penalty of perjury, that the donee--
 (I) is a qualified 
 organization (as defined in 
 paragraph (3)) with a purpose 
 of environmental protection, 
 land conservation, open space 
 preservation, or historic 
 preservation, and
 (II) has the resources to 
 manage and enforce the 
 restriction and a commitment to 
 do so, and
 (iii) in the case of any contribution 
 made in a taxable year beginning after 
 the date of the enactment of this 
 subparagraph, the taxpayer includes 
 with the taxpayer's return for the 
 taxable year of the contribution--
 (I) a qualified appraisal 
 (within the meaning of 
 subsection (f)(11)(E)) of the 
 qualified property interest,
 (II) photographs of the 
 entire exterior of the 
 building, and
 (III) a description of all 
 restrictions on the development 
 of the building.
 (C) Certified historic structure.--For 
 purposes of subparagraph (A)(iv), the term 
 ``certified historic structure'' means--
 (i) any building, structure, or land 
 area which is listed in the National 
 Register, or
 (ii) any building which is located in 
 a registered historic district (as 
 defined in section 47(c)(3)(B)) and is 
 certified by the Secretary of the 
 Interior to the Secretary as being of 
 historic significance to the district.
 A building, structure, or land area satisfies the 
 preceding sentence if it satisfies such sentence either 
 at the time of the transfer or on the due date 
 (including extensions) for filing the transferor's 
 return under this chapter for the taxable year in which 
 the transfer is made.
 (5) Exclusively for conservation purposes.--For 
 purposes of this subsection--
 (A) Conservation purpose must be protected.--
 A contribution shall not be treated as 
 exclusively for conservation purposes unless 
 the conservation purpose is protected in 
 perpetuity.
 (B) No surface mining permitted.--
 (i) In general.--Except as provided 
 in clause (ii), in the case of a 
 contribution of any interest where 
 there is a retention of a qualified 
 mineral interest, subparagraph (A) 
 shall not be treated as met if at any 
 time there may be extraction or removal 
 of minerals by any surface mining 
 method.
 (ii) Special rule.--With respect to 
 any contribution of property in which 
 the ownership of the surface estate and 
 mineral interests has been and remains 
 separated, subparagraph (A) shall be 
 treated as met if the probability of 
 surface mining occurring on such 
 property is so remote as to be 
 negligible.
 (6) Qualified mineral interest.--For purposes of this 
 subsection, the term ``qualified mineral interest'' 
 means--
 (A) subsurface oil, gas, or other minerals, 
 and
 (B) the right to access to such minerals.
 (7) Limitation on deduction for qualified 
 conservation contributions made by pass-through 
 entities.--
 (A) In general.--A contribution by a 
 partnership (whether directly or as a 
 distributive share of a contribution of another 
 partnership) shall not be treated as a 
 qualified conservation contribution for 
 purposes of this section if the amount of such 
 contribution exceeds 2.5 times the sum of each 
 partner's relevant basis in such partnership.
 (B) Relevant basis.--For purposes of this 
 paragraph--
 (i) In general.--The term ``relevant 
 basis'' means, with respect to any 
 partner, the portion of such partner's 
 modified basis in the partnership which 
 is allocable (under rules similar to 
 the rules of section 755) to the 
 portion of the real property with 
 respect to which the contribution 
 described in subparagraph (A) is made.
 (ii) Modified basis.--The term 
 ``modified basis'' means, with respect 
 to any partner, such partner's adjusted 
 basis in the partnership as 
 determined--
 (I) immediately before the 
 contribution described in 
 subparagraph (A),
 (II) without regard to 
 section 752, and
 (III) by the partnership 
 after taking into account the 
 adjustments described in 
 subclauses (I) and (II) and 
 such other adjustments as the 
 Secretary may provide.
 (C) Exception for contributions outside 3-
 year holding period.--Subparagraph (A) shall 
 not apply to any contribution which is made at 
 least 3 years after the latest of--
 (i) the last date on which the 
 partnership that made such contribution 
 acquired any portion of the real 
 property with respect to which such 
 contribution is made,
 (ii) the last date on which any 
 partner in the partnership that made 
 such contribution acquired any interest 
 in such partnership, and
 (iii) if the interest in the 
 partnership that made such contribution 
 is held through 1 or more 
 partnerships--
 (I) the last date on which 
 any such partnership acquired 
 any interest in any other such 
 partnership, and
 (II) the last date on which 
 any partner in any such 
 partnership acquired any 
 interest in such partnership.
 (D) Exception for family partnerships.--
 (i) In general.--Subparagraph (A) 
 shall not apply with respect to any 
 contribution made by any partnership if 
 substantially all of the partnership 
 interests in such partnership are held, 
 directly or indirectly, by an 
 individual and members of the family of 
 such individual.
 (ii) Members of the family.--For 
 purposes of this subparagraph, the term 
 ``members of the family'' means, with 
 respect to any individual--
 (I) the spouse of such 
 individual, and
 (II) any individual who bears 
 a relationship to such 
 individual which is described 
 in subparagraphs (A) through 
 (G) of section 152(d)(2).
 (E) Exception for contributions to preserve 
 certified historic structures.--Subparagraph 
 (A) shall not apply to any qualified 
 conservation contribution the conservation 
 purpose of which is the preservation of any 
 building which is a certified historic 
 structure (as defined in paragraph (4)(C)).
 (F) Application to other pass-through 
 entities.--Except as may be otherwise provided 
 by the Secretary, the rules of this paragraph 
 shall apply to S corporations and other pass-
 through entities in the same manner as such 
 rules apply to partnerships.
 (G) Regulations.--The Secretary shall 
 prescribe such regulations or other guidance as 
 may be necessary or appropriate to carry out 
 the purposes of this paragraph, including 
 regulations or other guidance--
 (i) to require reporting, including 
 reporting related to tiered 
 partnerships and the modified basis of 
 partners, and
 (ii) to prevent the avoidance of the 
 purposes of this paragraph.
 (i) Standard mileage rate for use of passenger automobile.--
For purposes of computing the deduction under this section for 
use of a passenger automobile, the standard mileage rate shall 
be 14 cents per mile.
 (j) Denial of deduction for certain travel expenses.--No 
deduction shall be allowed under this section for traveling 
expenses (including amounts expended for meals and lodging) 
while away from home, whether paid directly or by 
reimbursement, unless there is no significant element of 
personal pleasure, recreation, or vacation in such travel.
 [(k) Repealed. Pub. L. 113-295, div. A, title II, Sec. 
221(a)(28)(C), Dec. 19, 2014, 128 Stat. 4041].--
 (l) Treatment of certain amounts paid to or for the benefit 
of institutions of higher education.--
 (1) In general.--No deduction shall be allowed under 
 this section for any amount described in paragraph (2).
 (2) Amount described.--For purposes of paragraph (1), 
 an amount is described in this paragraph if--
 (A) the amount is paid by the taxpayer to or 
 for the benefit of an educational 
 organization--
 (i) which is described in subsection 
 (b)(1)(A)(ii), and
 (ii) which is an institution of 
 higher education (as defined in section 
 3304(f)), and
 (B) the taxpayer receives (directly or 
 indirectly) as a result of paying such amount 
 the right to purchase tickets for seating at an 
 athletic event in an athletic stadium of such 
 institution.
 If any portion of a payment is for the purchase of such 
 tickets, such portion and the remaining portion (if 
 any) of such payment shall be treated as separate 
 amounts for purposes of this subsection.
 (m) Certain donee income from intellectual property treated 
as an additional charitable contribution.--
 (1) Treatment as additional contribution.--In the 
 case of a taxpayer who makes a qualified intellectual 
 property contribution, the deduction allowed under 
 subsection (a) for each taxable year of the taxpayer 
 ending on or after the date of such contribution shall 
 be increased (subject to the limitations under 
 subsection (b)) by the applicable percentage of 
 qualified donee income with respect to such 
 contribution which is properly allocable to such year 
 under this subsection.
 (2) Reduction in additional deductions to extent of 
 initial deduction.--With respect to any qualified 
 intellectual property contribution, the deduction 
 allowed under subsection (a) shall be increased under 
 paragraph (1) only to the extent that the aggregate 
 amount of such increases with respect to such 
 contribution exceed the amount allowed as a deduction 
 under subsection (a) with respect to such contribution 
 determined without regard to this subsection.
 (3) Qualified donee income.--For purposes of this 
 subsection, the term ``qualified donee income'' means 
 any net income received by or accrued to the donee 
 which is properly allocable to the qualified 
 intellectual property.
 (4) Allocation of qualified donee income to taxable 
 years of donor.--For purposes of this subsection, 
 qualified donee income shall be treated as properly 
 allocable to a taxable year of the donor if such income 
 is received by or accrued to the donee for the taxable 
 year of the donee which ends within or with such 
 taxable year of the donor.
 (5) 10-year limitation.--Income shall not be treated 
 as properly allocable to qualified intellectual 
 property for purposes of this subsection if such income 
 is received by or accrued to the donee after the 10-
 year period beginning on the date of the contribution 
 of such property.
 (6) Benefit limited to life of intellectual 
 property.--Income shall not be treated as properly 
 allocable to qualified intellectual property for 
 purposes of this subsection if such income is received 
 by or accrued to the donee after the expiration of the 
 legal life of such property.
 (7) Applicable percentage.--For purposes of this 
 subsection, the term ``applicable percentage'' means 
 the percentage determined under the following table 
 which corresponds to a taxable year of the donor ending 
 on or after the date of the qualified intellectual 
 property contribution:
 (8) Qualified intellectual property contribution.--
 For purposes of this subsection, the term ``qualified 
 intellectual property contribution'' means any 
 charitable contribution of qualified intellectual 
 property--
 (A) the amount of which taken into account 
 under this section is reduced by reason of 
 subsection (e)(1), and
 (B) with respect to which the donor informs 
 the donee at the time of such contribution that 
 the donor intends to treat such contribution as 
 a qualified intellectual property contribution 
 for purposes of this subsection and section 
 6050L.
 (9) Qualified intellectual property.--For purposes of 
 this subsection, the term ``qualified intellectual 
 property'' means property described in subsection 
 (e)(1)(B)(iii) (other than property contributed to or 
 for the use of an organization described in subsection 
 (e)(1)(B)(ii)).
 (10) Other special rules.--
 (A) Application of limitations on charitable 
 contributions.--Any increase under this 
 subsection of the deduction provided under 
 subsection (a) shall be treated for purposes of 
 subsection (b) as a deduction which is 
 attributable to a charitable contribution to 
 the donee to which such increase relates.
 (B) Net income determined by donee.--The net 
 income taken into account under paragraph (3) 
 shall not exceed the amount of such income 
 reported under section 6050L(b)(1).
 (C) Deduction limited to 12 taxable years.--
 Except as may be provided under subparagraph 
 (D)(i), this subsection shall not apply with 
 respect to any qualified intellectual property 
 contribution for any taxable year of the donor 
 after the 12th taxable year of the donor which 
 ends on or after the date of such contribution.
 (D) Regulations.--The Secretary may issue 
 regulations or other guidance to carry out the 
 purposes of this subsection, including 
 regulations or guidance--
 (i) modifying the application of this 
 subsection in the case of a donor or 
 donee with a short taxable year, and
 (ii) providing for the determination 
 of an amount to be treated as net 
 income of the donee which is properly 
 allocable to qualified intellectual 
 property in the case of a donee who 
 uses such property to further a purpose 
 or function constituting the basis of 
 the donee's exemption under section 501 
 (or, in the case of a governmental 
 unit, any purpose described in section 
 170(c)) and does not possess a right to 
 receive any payment from a third party 
 with respect to such property.
 (n) Expenses paid by certain whaling captains in support of 
Native Alaskan subsistence whaling.--
 (1) In general.--In the case of an individual who is 
 recognized by the Alaska Eskimo Whaling Commission as a 
 whaling captain charged with the responsibility of 
 maintaining and carrying out sanctioned whaling 
 activities and who engages in such activities during 
 the taxable year, the amount described in paragraph (2) 
 (to the extent such amount does not exceed $10,000 for 
 the taxable year) shall be treated for purposes of this 
 section as a charitable contribution.
 (2) Amount described.--
 (A) In general.--The amount described in this 
 paragraph is the aggregate of the reasonable 
 and necessary whaling expenses paid by the 
 taxpayer during the taxable year in carrying 
 out sanctioned whaling activities.
 (B) Whaling expenses.--For purposes of 
 subparagraph (A), the term ``whaling expenses'' 
 includes expenses for--
 (i) the acquisition and maintenance 
 of whaling boats, weapons, and gear 
 used in sanctioned whaling activities,
 (ii) the supplying of food for the 
 crew and other provisions for carrying 
 out such activities, and
 (iii) storage and distribution of the 
 catch from such activities.
 (3) Sanctioned whaling activities.--For purposes of 
 this subsection, the term ``sanctioned whaling 
 activities'' means subsistence bowhead whale hunting 
 activities conducted pursuant to the management plan of 
 the Alaska Eskimo Whaling Commission.
 (4) Substantiation of expenses.--The Secretary shall 
 issue guidance requiring that the taxpayer substantiate 
 the whaling expenses for which a deduction is claimed 
 under this subsection, including by maintaining 
 appropriate written records with respect to the time, 
 place, date, amount, and nature of the expense, as well 
 as the taxpayer's eligibility for such deduction, and 
 that (to the extent provided by the Secretary) such 
 substantiation be provided as part of the taxpayer's 
 return of tax.
 (o) Special rules for fractional gifts.--
 (1) Denial of deduction in certain cases.--
 (A) In general.--No deduction shall be 
 allowed for a contribution of an undivided 
 portion of a taxpayer's entire interest in 
 tangible personal property unless all interests 
 in the property are held immediately before 
 such contribution by--
 (i) the taxpayer, or
 (ii) the taxpayer and the donee.
 (B) Exceptions.--The Secretary may, by 
 regulation, provide for exceptions to 
 subparagraph (A) in cases where all persons who 
 hold an interest in the property make 
 proportional contributions of an undivided 
 portion of the entire interest held by such 
 persons.
 (2) Valuation of subsequent gifts.--In the case of 
 any additional contribution, the fair market value of 
 such contribution shall be determined by using the 
 lesser of--
 (A) the fair market value of the property at 
 the time of the initial fractional 
 contribution, or
 (B) the fair market value of the property at 
 the time of the additional contribution.
 (3) Recapture of deduction in certain cases; addition 
 to tax.--
 (A) Recapture.--The Secretary shall provide 
 for the recapture of the amount of any 
 deduction allowed under this section (plus 
 interest) with respect to any contribution of 
 an undivided portion of a taxpayer's entire 
 interest in tangible personal property--
 (i) in any case in which the donor 
 does not contribute all of the 
 remaining interests in such property to 
 the donee (or, if such donee is no 
 longer in existence, to any person 
 described in section 170(c)) on or 
 before the earlier of--
 (I) the date that is 10 years 
 after the date of the initial 
 fractional contribution, or
 (II) the date of the death of 
 the donor, and
 (ii) in any case in which the donee 
 has not, during the period beginning on 
 the date of the initial fractional 
 contribution and ending on the date 
 described in clause (i)--
 (I) had substantial physical 
 possession of the property, and
 (II) used the property in a 
 use which is related to a 
 purpose or function 
 constituting the basis for the 
 organizations' exemption under 
 section 501.
 (B) Addition to tax.--The tax imposed under 
 this chapter for any taxable year for which 
 there is a recapture under subparagraph (A) 
 shall be increased by 10 percent of the amount 
 so recaptured.
 (4) Definitions.--For purposes of this subsection--
 (A) Additional contribution.--The term 
 ``additional contribution'' means any 
 charitable contribution by the taxpayer of any 
 interest in property with respect to which the 
 taxpayer has previously made an initial 
 fractional contribution.
 (B) Initial fractional contribution.--The 
 term ``initial fractional contribution'' means, 
 with respect to any taxpayer, the first 
 charitable contribution of an undivided portion 
 of the taxpayer's entire interest in any 
 tangible personal property.
 (p) Special rule for taxpayers who do not elect to itemize 
deductions.--In the case of any taxable year beginning in 2021, 
if the individual does not elect to itemize deductions for such 
taxable year, the deduction under this section shall be equal 
to the deduction, not in excess of $300 ($600 in the case of a 
joint return), which would be determined under this section if 
the only charitable contributions taken into account in 
determining such deduction were contributions made in cash 
during such taxable year (determined without regard to 
subsections (b)(1)(G)(ii) and (d)(1)) to an organization 
described in section 170(b)(1)(A) and not--
 (1) to an organization described in section 
 509(a)(3), or
 (2) for the establishment of a new, or maintenance of 
 an existing, donor advised fund (as defined in section 
 4966(d)(2)).
 (q) Other cross references.--
 (1) For treatment of certain organizations 
 providing child care, see section 501(k).
 (2) For charitable contributions of estates 
 and trusts, see section 642(c).
 (3) For nondeductibility of contributions by 
 common trust funds, see section 584.
 (4) For charitable contributions of partners, 
 see section 702.
 (5) For charitable contributions of 
 nonresident aliens, see section 873.
 (6) For treatment of gifts for benefit of or 
 use in connection with the Naval Academy as 
 gifts to or for use of the United States, see 
 section 8473 of title 10, United States Code.
 (7) For treatment of gifts accepted by the 
 Secretary of State, the Director of the 
 International Communication Agency, or the 
 Director of the United States International 
 Development Cooperation Agency, as gifts to or 
 for the use of the United States, see section 
 25 of the State Department Basic Authorities 
 Act of 1956.
 (8) For treatment of gifts of money accepted 
 by the Attorney General for credit to the 
 ``Commissary Funds Federal Prisons'' as gifts 
 to or for the use of the United States, see 
 section 4043 of title 18, United States Code.
 (9) For charitable contributions to or for 
 the use of Indian tribal governments (or their 
 subdivisions), see section 7871.

 * * * * * * *