II

106TH CONGRESS

2D SESSION S. 2781

To amend the Internal Revenue Code of 1986 to provide that a deduction

equal to fair market value shall be allowed for charitable contributions

of literary, musical, artistic, or scholarly compositions created by the

donor.

IN THE SENATE OF THE UNITED STATES

JUNE 23, 2000

Mr. LEAHY (for himself, Mr. BENNETT, and Mr. LIEBERMAN) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide

that a deduction equal to fair market value shall be

allowed for charitable contributions of literary, musical,

artistic, or scholarly compositions created by the donor.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Artist-Museum Part5 nership Act’’.
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1 SEC. 2. CHARITABLE CONTRIBUTIONS OF CERTAIN ITEMS

2 CREATED BY THE TAXPAYER.

3 (a) IN GENERAL.—Subsection (e) of section 170 of

4 the Internal Revenue Code of 1986 (relating to certain

5 contributions of ordinary income and capital gain prop6 erty) is amended by adding at the end the following new

7 paragraph:

8 ‘‘(7) SPECIAL RULE FOR CERTAIN CONTRIBU9 TIONS OF LITERARY, MUSICAL, OR ARTISTIC COM10 POSITIONS.—

11 ‘‘(A) IN GENERAL.—In the case of a quali12 fied artistic charitable contribution—

13 ‘‘(i) the amount of such contribution

14 shall be the fair market value of the prop15 erty contributed (determined at the time of

16 such contribution), and

17 ‘‘(ii) no reduction in the amount of

18 such contribution shall be made under

19 paragraph (1).

20 ‘‘(B) QUALIFIED ARTISTIC CHARITABLE

21 CONTRIBUTION.—For purposes of this para22 graph, the term ‘qualified artistic charitable

23 contribution’ means a charitable contribution of

24 any literary, musical, artistic, or scholarly com25 position, or similar property, or the copyright

26 thereon (or both), but only if—
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1 ‘‘(i) such property was created by the

2 personal efforts of the taxpayer making

3 such contribution no less than 18 months

4 prior to such contribution,

5 ‘‘(ii) the taxpayer—

6 ‘‘(I) has received a qualified ap7 praisal of the fair market value of

8 such property in accordance with the

9 regulations under this section, and

10 ‘‘(II) attaches to the taxpayer’s

11 income tax return for the taxable year

12 in which such contribution was made

13 a copy of such appraisal,

14 ‘‘(iii) the donee is an organization de15 scribed in subsection (b)(1)(A),

16 ‘‘(iv) the use of such property by the

17 donee is related to the purpose or function

18 constituting the basis for the donee’s ex19 emption under section 501 (or, in the case

20 of a governmental unit, to any purpose or

21 function described under subsection (c)),

22 ‘‘(v) the taxpayer receives from the

23 donee a written statement representing

24 that the donee’s use of the property will be
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1 in accordance with the provisions of clause

2 (iv), and

3 ‘‘(vi) the written appraisal referred to

4 in clause (ii) includes evidence of the ex5 tent (if any) to which property created by

6 the personal efforts of the taxpayer and of

7 the same type as the donated property is

8 or has been—

9 ‘‘(I) owned, maintained, and dis10 played by organizations described in

11 subsection (b)(1)(A), and

12 ‘‘(II) sold to or exchanged by

13 persons other than the taxpayer,

14 donee, or any related person (as de15 fined in section 465(b)(3)(C)).

16 ‘‘(C) MAXIMUM DOLLAR LIMITATION; NO

17 CARRYOVER OF INCREASED DEDUCTION.—The

18 increase in the deduction under this section by

19 reason of this paragraph for any taxable year—

20 ‘‘(i) shall not exceed the artistic ad21 justed gross income of the taxpayer for

22 such taxable year, and

23 ‘‘(ii) shall not be taken into account in

24 determining the amount which may be car-
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1 ried from such taxable year under sub2 section (d).

3 ‘‘(D) ARTISTIC ADJUSTED GROSS IN4 COME.—For purposes of this paragraph, the

5 term ‘artistic adjusted gross income’ means

6 that portion of the adjusted gross income of the

7 taxpayer for the taxable year attributable to—

8 ‘‘(i) income from the sale or use of

9 property created by the personal efforts of

10 the taxpayer which is of the same type as

11 the donated property, and

12 ‘‘(ii) income from teaching, lecturing,

13 performing, or similar activity with respect

14 to property described in clause (i).

15 ‘‘(E) PARAGRAPH NOT TO APPLY TO CER16 TAIN CONTRIBUTIONS.—Subparagraph (A) shall

17 not apply to any charitable contribution of any

18 letter, memorandum, or similar property which

19 was written, prepared, or produced by or for an

20 individual while the individual is an officer or

21 employee of any person (including any govern22 ment agency or instrumentality) unless such

23 letter, memorandum, or similar property is en24 tirely personal.
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1 ‘‘(F) COPYRIGHT TREATED AS SEPARATE

2 PROPERTY FOR PARTIAL INTEREST RULE.—In

3 the case of a qualified artistic charitable con4 tribution, the tangible literary, musical, artistic,

5 or scholarly composition, or similar property

6 and the copyright on such work shall be treated

7 as separate properties for purposes of this para8 graph and subsection (f)(3).’’.

9 (b) EFFECTIVE DATE.—The amendment made by

10 this section shall apply to contributions made after the

11 date of the enactment of this Act in taxable years ending

12 after such date.

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