Tangible Personal Property

As with gifts of long-term capital-gain securities or real estate, you are entitled to a charitable deduction for a gift of long-term capital-gain tangible personal property such as works of art, rare books, and stamp or coin collections. (Note: The top capital-gain tax rate on such assets is 28%.) How much you can deduct depends on the so-called standard of "related use."

Here is how the standard is applied: If the use of the contributed property is related to the exempt purposes of a charity (e.g., a painting to a museum or rare books to a library), you are entitled to a charitable income-tax deduction for the fair-market value of the property.

If the use of the contributed property is unrelated to the exempt purposes of the charity (e.g., stamp collection to the Indianapolis Zoo to sell and use the proceeds), you are entitled to a charitable deduction for your basis in the property.

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