815 
amount which bears the same ratio to the fair mar-
ket value of the contribution as— 
‘‘(A) the sum of the credits allowed to the 
taxpayer under section 47 for the 5 preceding 
taxable years with respect to any building which 
is a part of such contribution, bears to 
‘‘(B) the fair market value of the building 
on the date of the contribution.’’. 
(e) EFFECTIVE DATES.— 
(1) SPECIAL RULES FOR BUILDINGS IN REG-
ISTERED
HISTORIC
DISTRICTS.—The amendments 
made by subsection (a) shall apply to contributions 
made after July 25, 2006. 
(2) DISALLOWANCE OF DEDUCTION FOR STRUC-
TURES
AND
LAND; REDUCTION
FOR
REHABILITA-
TION
CREDIT.—The amendments made by sub-
sections (b) and (d) shall apply to contributions 
made after the date of the enactment of this Act. 
(3) FILING
FEE.—The amendment made by 
subsection (c) shall apply to contributions made 180 
days after the date of the enactment of this Act. 
SEC. 1214. CHARITABLE CONTRIBUTIONS OF TAXIDERMY 
PROPERTY. 
(a) DENIAL OF LONG-TERM CAPITAL GAIN.—Sub-
paragraph (B) of section 170(e)(1) is amended by striking 
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‘‘or’’ at the end of clause (ii), by inserting ‘‘or’’ at the 
end of clause (iii), and by inserting after clause (iii) the 
following new clause: 
‘‘(iv) of any taxidermy property which 
is contributed by the person who prepared, 
stuffed, or mounted the property or by any 
person who paid or incurred the cost of 
such preparation, stuffing, or mounting,’’. 
(b) TREATMENT OF BASIS.—Subsection (f) of section 
170, as amended by this Act, is amended by adding at 
the end the following new paragraph: 
‘‘(15) SPECIAL RULE FOR TAXIDERMY PROP-
ERTY.— 
‘‘(A) BASIS.—For purposes of this section 
and notwithstanding section 1012, in the case 
of a charitable contribution of taxidermy prop-
erty which is made by the person who prepared, 
stuffed, or mounted the property or by any per-
son who paid or incurred the cost of such prep-
aration, stuffing, or mounting, only the cost of 
the preparing, stuffing, or mounting shall be in-
cluded in the basis of such property. 
‘‘(B) TAXIDERMY
PROPERTY.—For pur-
poses of this section, the term ‘taxidermy prop-
erty’ means any work of art which— 
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‘‘(i) is the reproduction or preserva-
tion of an animal, in whole or in part, 
‘‘(ii) is prepared, stuffed, or mounted 
for purposes of recreating one or more 
characteristics of such animal, and 
‘‘(iii) contains a part of the body of 
the dead animal.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after July 
25, 2006. 
SEC. 1215. RECAPTURE OF TAX BENEFIT FOR CHARITABLE 
CONTRIBUTIONS OF EXEMPT USE PROPERTY 
NOT USED FOR AN EXEMPT USE. 
(a) RECAPTURE OF DEDUCTION ON CERTAIN SALES 
OF EXEMPT USE PROPERTY.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
170(e)(1)(B) (related to certain contributions of or-
dinary income and capital gain property) is amended 
to read as follows: 
‘‘(i) of tangible personal property— 
‘‘(I) if the use by the donee is 
unrelated to the purpose or function 
constituting the basis for its exemp-
tion under section 501 (or, in the case 
of a governmental unit, to any pur-
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pose or function described in sub-
section (c)), or 
‘‘(II) which is applicable property 
(as defined in paragraph (7)(C)) 
which is sold, exchanged, or otherwise 
disposed of by the donee before the 
last day of the taxable year in which 
the contribution was made and with 
respect to which the donee has not 
made a certification in accordance 
with paragraph (7)(D),’’. 
(2) DISPOSITIONS AFTER CLOSE OF TAXABLE 
YEAR.—Section 170(e) is amended by adding at the 
end the following new paragraph: 
‘‘(7) RECAPTURE OF DEDUCTION ON CERTAIN 
DISPOSITIONS OF EXEMPT USE PROPERTY.— 
‘‘(A) IN GENERAL.—In the case of an ap-
plicable disposition of applicable property, there 
shall be included in the income of the donor of 
such property for the taxable year of such 
donor in which the applicable disposition occurs 
an amount equal to the excess (if any) of— 
‘‘(i) the amount of the deduction al-
lowed to the donor under this section with 
respect to such property, over 
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‘‘(ii) the donor’s basis in such prop-
erty at the time such property was contrib-
uted. 
‘‘(B) APPLICABLE DISPOSITION.—For pur-
poses of this paragraph, the term ‘applicable 
disposition’ means any sale, exchange, or other 
disposition by the donee of applicable prop-
erty— 
‘‘(i) after the last day of the taxable 
year of the donor in which such property 
was contributed, and 
‘‘(ii) before the last day of the 3-year 
period beginning on the date of the con-
tribution of such property, 
unless the donee makes a certification in ac-
cordance with subparagraph (D). 
‘‘(C) APPLICABLE
PROPERTY.—For pur-
poses of this paragraph, the term ‘applicable 
property’ means charitable deduction property 
(as defined in section 6050L(a)(2)(A))— 
‘‘(i) which is tangible personal prop-
erty the use of which is identified by the 
donee as related to the purpose or function 
constituting the basis of the donee’s ex-
emption under section 501, and 
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‘‘(ii) for which a deduction in excess 
of the donor’s basis is allowed. 
‘‘(D) 
CERTIFICATION.—A 
certification 
meets the requirements of this subparagraph if 
it is a written statement which is signed under 
penalty of perjury by an officer of the donee or-
ganization and— 
‘‘(i) which— 
‘‘(I) certifies that the use of the 
property by the donee was related to 
the purpose or function constituting 
the basis for the donee’s exemption 
under section 501, and 
‘‘(II) describes how the property 
was used and how such use furthered 
such purpose or function, or 
‘‘(ii) which— 
‘‘(I) states the intended use of 
the property by the donee at the time 
of the contribution, and 
‘‘(II) certifies that such intended 
use has become impossible or infeasi-
ble to implement.’’. 
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(b) REPORTING REQUIREMENTS.—Paragraph (1) of 
section 6050L(a) (relating to returns relating to certain 
dispositions of donated property) is amended— 
(1) by striking ‘‘2 years’’ and inserting ‘‘3 
years’’, and 
(2) by striking ‘‘and’’ at the end of subpara-
graph (D), by striking the period at the end of sub-
paragraph (E) and inserting a comma, and by in-
serting at the end the following: 
‘‘(F) a description of the donee’s use of the 
property, and 
‘‘(G) a statement indicating whether the 
use of the property was related to the purpose 
or function constituting the basis for the 
donee’s exemption under section 501. 
In any case in which the donee indicates that the 
use of applicable property (as defined in section 
170(e)(7)(C)) was related to the purpose or function 
constituting the basis for the exemption of the donee 
under section 501 under subparagraph (G), the 
donee shall include with the return the certification 
described in section 170(e)(7)(D) if such certifi-
cation is made under section 170(e)(7).’’. 
(c) PENALTY.— 
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(1) IN GENERAL.—Part I of subchapter B of 
chapter 68 (relating to assessable penalties) is 
amended by inserting after section 6720A the fol-
lowing new section: 
‘‘SEC. 6720B. FRAUDULENT IDENTIFICATION OF EXEMPT 
USE PROPERTY. 
‘‘In addition to any criminal penalty provided by law, 
any person who identifies applicable property (as defined 
in section 170(e)(7)(C)) as having a use which is related 
to a purpose or function constituting the basis for the 
donee’s exemption under section 501 and who knows that 
such property is not intended for such a use shall pay a 
penalty of $10,000.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter B of chapter 68 is 
amended by adding after the item relating to section 
6720A the following new item: 
‘‘Sec. 6720B. Fraudulent identification of exempt use property.’’. 
(d) EFFECTIVE DATE.— 
(1) RECAPTURE.—The amendments made by 
subsection (a) shall apply to contributions after Sep-
tember 1, 2006. 
(2) REPORTING.—The amendments made by 
subsection (b) shall apply to returns filed after Sep-
tember 1, 2006. 
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(3) PENALTY.—The amendments made by sub-
section (c) shall apply to identifications made after 
the date of the enactment of this Act. 
SEC. 1216. LIMITATION OF DEDUCTION FOR CHARITABLE 
CONTRIBUTIONS OF CLOTHING AND HOUSE-
HOLD ITEMS. 
(a) IN GENERAL.—Subsection (f) of section 170, as 
amended by this Act, is amended by adding at the end 
the following new paragraph: 
‘‘(16) CONTRIBUTIONS
OF
CLOTHING
AND 
HOUSEHOLD ITEMS.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual, partnership, or corporation, no deduc-
tion shall be allowed under subsection (a) for 
any contribution of clothing or a household item 
unless such clothing or household item is in 
good used condition or better. 
‘‘(B) ITEMS
OF
MINIMAL
VALUE.—Not-
withstanding subparagraph (A), the Secretary 
may by regulation deny a deduction under sub-
section (a) for any contribution of clothing or a 
household item which has minimal monetary 
value. 
‘‘(C) EXCEPTION
FOR
CERTAIN
PROP-
ERTY.—Subparagraphs (A) and (B) shall not 
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ccoleman on PROD1PC71 with BILLS
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apply to any contribution of a single item of 
clothing or a household item for which a deduc-
tion of more than $500 is claimed if the tax-
payer includes with the taxpayer’s return a 
qualified appraisal with respect to the property. 
‘‘(D) HOUSEHOLD ITEMS.—For purposes 
of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘house-
hold items’ includes furniture, furnishings, 
electronics, appliances, linens, and other 
similar items. 
‘‘(ii) EXCLUDED ITEMS.—Such term 
does not include— 
‘‘(I) food, 
‘‘(II) paintings, antiques, and 
other objects of art, 
‘‘(III) jewelry and gems, and 
‘‘(IV) collections. 
‘‘(E) SPECIAL RULE FOR PASS-THRU ENTI-
TIES.—In the case of a partnership or S cor-
poration, this paragraph shall be applied at the 
entity level, except that the deduction shall be 
denied at the partner or shareholder level.’’. 
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ccoleman on PROD1PC71 with BILLS
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after the 
date of enactment of this Act. 
SEC. 1217. MODIFICATION OF RECORDKEEPING REQUIRE-
MENTS 
FOR 
CERTAIN 
CHARITABLE 
CON-
TRIBUTIONS. 
(a) RECORDKEEPING
REQUIREMENT.—Subsection 
(f) of section 170, as amended by this Act, is amended 
by adding at the end the following new paragraph: 
‘‘(17) RECORDKEEPING.—No deduction shall be 
allowed under subsection (a) for any contribution of 
a cash, check, or other monetary gift unless the 
donor maintains as a record of such contribution a 
bank record or a written communication from the 
donee showing the name of the donee organization, 
the date of the contribution, and the amount of the 
contribution.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made in taxable 
years beginning after the date of the enactment of this 
Act. 
SEC. 1218. CONTRIBUTIONS OF FRACTIONAL INTERESTS IN 
TANGIBLE PERSONAL PROPERTY. 
(a) INCOME TAX.—Section 170 (relating to chari-
table, etc., contributions and gifts) is amended by redesig-
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nating subsection (o) as subsection (p) and by inserting 
after subsection (n) the following new subsection: 
‘‘(o) SPECIAL RULES FOR FRACTIONAL GIFTS.— 
‘‘(1) DENIAL
OF
DEDUCTION
IN
CERTAIN 
CASES.— 
‘‘(A) IN GENERAL.—No deduction shall be 
allowed for a contribution of an undivided por-
tion of a taxpayer’s entire interest in tangible 
personal property unless all interest in the 
property is held immediately before such con-
tribution by— 
‘‘(i) the taxpayer, or 
‘‘(ii) the taxpayer and the donee. 
‘‘(B) EXCEPTIONS.—The Secretary may, 
by regulation, provide for exceptions to sub-
paragraph (A) in cases where all persons who 
hold an interest in the property make propor-
tional contributions of an undivided portion of 
the entire interest held by such persons. 
‘‘(2) VALUATION OF SUBSEQUENT GIFTS.—In 
the case of any additional contribution, the fair mar-
ket value of such contribution shall be determined by 
using the lesser of— 
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‘‘(A) the fair market value of the property 
at the time of the initial fractional contribution, 
or 
‘‘(B) the fair market value of the property 
at the time of the additional contribution. 
‘‘(3) RECAPTURE OF DEDUCTION IN CERTAIN 
CASES; ADDITION TO TAX.— 
‘‘(A) RECAPTURE.—The Secretary shall 
provide for the recapture of the amount of any 
deduction allowed under this section (plus inter-
est) with respect to any contribution of an undi-
vided portion of a taxpayer’s entire interest in 
tangible personal property— 
‘‘(i) in any case in which the donor 
does not contribute all of the remaining in-
terest in such property to the donee (or, if 
such donee is no longer in existence, to any 
person described in section 170(c)) before 
the earlier of— 
‘‘(I) the date that is 10 years 
after the date of the initial fractional 
contribution, or 
‘‘(II) the date of the death of the 
donor, and 
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