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TITLE 26-INTERNAL REVENUE CODE (C) Special limitation with respect to contribu- tions of certain capital gain property (i) In the case of charitable contribu- tions 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 ac- count under subsection (a) for any tax- able year shall not exceed 30 percent of the taxpayer's contribution base for such year. For purposes of this subsection, con- tributions of capital gain property to which this paragraph applies shall be taken into account after all other charita- ble contributions. (ii) If charitable contributions described in subparagraph (A) of capital gain prop- erty 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 contri- butions of capital gain property (to which subsection (e)(1)(B) does rot otherwise apply) made by the taxpayer during the taxable year. If such an election is made, clauses (i) and ii) shall not apply to con- tributions 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 contribu- tion year for which an election was not made under this clause, such contribu- tions shall be reduced as if subsection (e)(1) had applied to such contributions in the year in which made. (iv) For purposes of this subparagraph, the term "capital gain property" means with respect to any contribution, any cap- ital asset the sale of which at its fair market value at the time of the contribu- tion 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 sec- tion 1231(b)) shall be treated as a capital asset. (D) 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 de- fined in se,'t-on 509(a)) which, not later than the Abth day of the third month after the close of the found.',tion's taxable year in which contributions are received, makes qualifying distributions (as defined in section 4942(g), without regard to para- graph (3) thereof), which are treated, after the application of section 4942(g)(3), as distributions out of corpus (in accor- dance with section 4942(h)) in an amount equal to 100 percent of such contribu- tions, and with respect to which the tax- payer 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 con- tributions to which are pooled in a common fund and which would be de- scribed in section 509(a)(3) but for the right of any substantial contributor (here- after in this clause called "donor") or his spouse to designate annually the recipi- ents, from among organizations described in paragraph (1) of section 509(a), of the income attributable to the donor's contri- bution to the fund and to direct (by deed or by will) the payment, to an organiza- tion described in such paragraph (1), of the corpus in the common fund attribut- able 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 organiza- tions 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 attribut- able 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 recipi- ents of such corpus. (E) 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, the total de- ductions under subsection (a) for any taxable year shall not exceed 5 percent of the taxpay- er's taxable income computed without regard to- (A) this section, (B) part VIII (except section 248), (C) any net operating loss carryback to the taxable year under section 172, (D) section 922 (special deduction for Western Hemisphere trade corporations), and (E) any capital loss carryback to the tax- able year under section 1212(a)(1). (c) Charitable contribution defined For purposes of this section, the term "chari- table 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 uontribu tion or gift is made for exclusively public pur- poses. Page 163 § 170