Limitations on Charitable Deductions for IP

The corporate tax bill (H.R. 4520) signed by President Bush on October 22, 2004 contains a provision that largely eliminates the tax deductions for contributions of patents and other intellectual property to charitable organizations.  The law limits a taxpayer’s deduction for the contribution of intellectual property to a charitable organization to the lesser of the taxpayer’s basis and the contributed property or the fair market value of the property.  Additional burdens are also placed on the taxpayer in order to be able to receive the claimed deductions.

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