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Charitable Contributions - Part 2

• Estates as well as individuals are permitted to claim charitable contribution deductions under certain conditions. Section 2055 of the Internal Revenue Code provides that no charitable contribution is deductible (with a few exceptions) if an interest in property passes from a decedent to a charity and a partial interest in the same property passes to a noncharitable beneficiary for less than fair value. In a recent private letter ruling, the IRS held that the estate of a deceased farmer, which left an entire farm to a charitable organization, was entitled to a charitable contribution deduction despite the fact that the will also required the charity to lease the farm to two of the farmer's relatives for a period of five years at which time they would have an option to purchase the land. The IRS ruling was conditioned on the assumption that the annual rental payments (and option ...

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Posted:
  • July 1, 1988

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