Page 10

If you make an additional contribution later, the fair market value of that contribution will be determined by using the smaller of: • The fair market value of the property at the time of the initial contribution, or • The fair market value of the property at the time of the additional contribution. Tangible personal property is defined later under Future Interest in Tangible Personal Property. A fractional interest in property is an undivided portion of your entire interest in the property. Example. An undivided one-quarter inter- est in a painting that entitles an art museum to possession of the painting for 3 months of each year is a fractional interest in the property. Recapture of deduction. You must recapture your charitable contribution deduction by in- cluding it in your income if both of the following statements are true. 1. You contributed a fractional interest in tan- gible personal property after August 17, 2006. 2. You don't contribute the rest of your inter- ests in the property to the original recipient or, if it no longer exists, another qualified organization on or before the earlier of: a. The date that is 10 years after the date of the initial contribution, or b. The date of your death. Recapture is also required if the qualified or- ganization hasn't taken substantial physical possession of the property and used it in a way related to the organization's purpose during the period beginning on the date of the initial contri- bution and ending on the earlier of: 1. The date that is 10 years after the date of the initial contribution, or 2. The date of your death. Additional tax. If you must recapture your deduction, you must also pay interest and an additional tax equal to 10% of the amount re- captured. Qualified Conservation Contribution A qualified conservation contribution is a contri- bution of a qualified real property interest to a qualified organization to be used only for con- servation purposes. Qualified organization. For purposes of a qualified conservation contribution, a qualified organization is: • A governmental unit; • A publicly supported charity; or • An organization controlled by, and oper- ated for the exclusive benefit of, a govern- mental unit or a publicly supported charity. The organization must also have a commitment to protect the conservation purposes of the donation and must have the resources to en- force the restrictions. A publicly supported charity is an organiza- tion of the type described in (1) under Types of Qualified Organizations, earlier, that normally receives a substantial part of its support, other than income from its exempt activities, from di- rect or indirect contributions from the general public or from governmental units. Qualified real property interest. This is any of the following interests in real property. 1. Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of ac- cess to these minerals). 2. A remainder interest. 3. A restriction (granted in perpetuity) on the use that may be made of the real property. Conservation purposes. Your contribution must be made only for one of the following con- servation purposes. • Preserving land areas for outdoor recrea- tion by, or for the education of, the general public. • Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosys- tem. • Preserving open space, including farmland and forest land, if it yields a significant pub- lic benefit. The open space must be pre- served either for the scenic enjoyment of the general public or under a clearly de- fined federal, state, or local governmental conservation policy. • Preserving a historically important land area or a certified historic structure. Building in registered historic district. If a building in a registered historic district is a certi- fied historic structure, a contribution of a quali- fied real property interest that is an easement or other restriction on the exterior of the building is deductible only if it meets all of the following conditions. 1. The restriction must preserve the entire exterior of the building (including its front, sides, rear, and height) and must prohibit any change to the exterior of the building that is inconsistent with its historical char- acter. 2. You and the organization receiving the contribution must enter into a written agreement certifying, under penalty of per- jury, that the organization: a. Is a qualified organization with a pur- pose of environmental protection, land conservation, open space pres- ervation, or historic preservation; and b. Has the resources to manage and en- force the restriction and a commit- ment to do so. 3. You must include with your return: a. A Qualified appraisal, performed by a Qualified appraiser; b. Photographs of the building's entire exterior; and c. A description of all restrictions on de- velopment of the building, such as zoning laws and restrictive covenants. If you claimed the rehabilitation credit for the building for any of the 5 years before the year of the contribution, your charitable deduction is re- duced. For more information, see Form 3468, Investment Credit, and Internal Revenue Code section 170(f)(14). If you claim a deduction of more than $10,000, your deduction won't be allowed un- less you pay a $500 filing fee. See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. More information. For information about de- termining the fair market value of qualified con- servation contributions, see Pub. 561. For infor- mation about the limits that apply to deductions for this type of contribution, see Limits on De- ductions, later. For more information about qualified conservation contributions, see Regu- lations section 1.170A-14. Future Interest in Tangible Personal Property You can't deduct the value of a charitable con- tribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. But see Frac- tional Interest in Tangible Personal Property, earlier, and Tangible personal property put to unrelated use, later. Related persons include your spouse, chil- dren, grandchildren, brothers, sisters, and pa- rents. Related organizations may include a part- nership or corporation in which you have an interest, or an estate or trust with which you have a connection. Tangible personal property. This is any property, other than land or buildings, that can be seen or touched. It includes furniture, books, jewelry, paintings, and cars. Future interest. This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest un- der state law. Example. You own an antique car that you contribute to a museum. You give up owner- ship, but retain the right to keep the car in your garage with your personal collection. Because you keep an interest in the property, you can't deduct the contribution. If you turn the car over to the museum in a later year, giving up all rights to its use, possession, and enjoyment, you can take a deduction for the contribution in that later year. Inventory If you contribute inventory (property you sell in the course of your business), the amount you can deduct is the smaller of its fair market value on the day you contributed it or its basis. The basis of contributed inventory is any cost incur- red for the inventory in an earlier year that you would otherwise include in your opening inven- tory for the year of the contribution. You must remove the amount of your charitable Page 10 Publication 526 (2021)