In Uncategorized on 03/27/2023 at 15:57

Yes and no; yes, it’s about a charitable deduction in the South (NC), but no, it’s not a syndicated conservation easement deduction involving scrub with rocks underneath. Rather, Duncan Bass, T. C. Memo. 2023-41, filed 3/27/23, made a bunch charitable contributions (hi, Judge Holmes) of clothing and nonclothing items, but the greatest of these was his clothing contributions.

Judge Tamara Ashford explains.

“… petitioner donated men’s, women’s, and children’s clothing and various nonclothing items to Goodwill and the Salvation Army. He acquired these donated items at no charge as they had been given to him by [his landscaping outfit]’s residential clients. He made 173 separate trips to Goodwill and the Salvation Army, often making multiple trips on the same day to avoid in his view the need to have the items appraised. For each trip, a Goodwill or Salvation Army worker as the case may be provided petitioner with a donation acknowledgment receipt, which he in turn filled out, listing the items donated and their fair market values. Petitioner’s Goodwill receipts reflect donated items totaling $18,837, consisting of clothing totaling $13,852….” Tc> C. Memo. 2023-41, at p. 4.

Sort of a variation on the $9K cash bank deposits to get under the $10K suspicious activity reporting requirements. And it meets with the same fate.

“Relying on the fact that he made 173 separate trips to Goodwill and the Salvation Army and received a donation acknowledgment receipt for each trip (all of which are in the record), at trial petitioner testified that because the donated items reflected on each receipt had a fair market value of less than $250, he did not need to have any of the items appraised. Petitioner, however, misapprehends the applicable law. … for purposes of determining the $5,000 threshold and accordingly whether the ‘appraisal’ requirements are applicable, section 170(f)(11)(F) and Treasuary [sic] Regulation § 1.170A-13(c)(1)(i) mandate aggregating similar items of property donated to one or more charitable organizations. Petitioner’s Goodwill and Salvation Army receipts reflect donations of men’s, women’s, and children’s clothing, as well as various nonclothing items. Pursuant to section 170(f)(11)(F) and Treasuary Regualtion [sic] § 1.170A-13(c)(1)(i), all the clothing donations must be aggregated. The aggregate of these donations is $25,446 (i.e., $13,852 (the total amount of the clothing donations to Goodwill) plus $11,594 (the total amount of the clothing donations to the Salvation Army)), which is over five times the $5,000 threshold and thus necessitates that they be appraised. Since there was no such appraisal, petitioner is not entitled to the deductions claimed on his 2017 Schedule A for noncash charitable gifts of clothing to Goodwill and the Salvation Army.” T. C. Memo. 2023-41, at p. 17.

Duncan does get the nonclothings, as they are sufficiently various to be nonaggregatable, and thus slip under the radar.

But Treasuary gets the most of the deficiency.


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: