Contributions to Private Foundations of Tangible Personal Property

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One of the great things about private foundations is their flexibility in accepting contributions of all types of assets. Donors frequently contribute publicly traded securities, private equity, real estate, and interests in partnership investments to their foundations. But it is not uncommon for donors to also contribute their interests in tangible personal property to their private foundations. The types of tangible personal property that may be contributed to a private foundation are practically unlimited. Some of these include artwork, jewelry, sculpture, rare coins, boat slips, cars, and motorcycles. To make sure that the gift makes sense for both the donor and the recipient foundation, important factors are considered in advance of the contribution.

When tangible personal property is donated to a private non-operating foundation, the donor will want to understand the charitable deduction limitations, especially if the asset has appreciated in value, since the donor’s charitable deduction is the lower of the donated property’s fair market value at the time of the donation or the donor’s tax basis in the property (typically what the donor paid for it). And once the tangible property is in the foundation, the foundation will need to decide how and where the assets get stored. This is an important consideration because generally, a disqualified person, such as a foundation’s officer, director, or substantial contributor, may not store valuable tangible personal property in his or her residence or commercial property.

Other important considerations for the foundation include:

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