14.18 Carryover for Excess Donations

If you make donations that are not deductible because they exceed the 50%, 30%, or 20% of adjusted gross income ceilings (14.17), you may carry the excess over the next five years. A special 15-year carryforward for donations of qualified conservation contributions made in 2006-2011 and subject to the special 50% and 100% of adjusted gross income ceilings (14.17) may be extended to 2012 by Congress; see the e-Supplement at jklasser.com for a legislation update.

In each carryover year, the original percentage ceiling applies. For example, where contributions of appreciated long-term intangible personal property or real estate (or tangible personal property put to a related use by the charity) exceed the 30% ceiling for capital gain property (14.17), the excess remains subject to the 30% ceiling in the carryover years.

In any carryover year, you must first figure your deduction for contributions in the current year under the applicable 50%, 30%, or 20% ceilings. For each category of property carried over, the carryover contributions are deductible only after the deduction for current year donations is figured. The total deduction in the carryover year, for both current year and carryover contributions, cannot exceed 50% of adjusted gross income for the carryover year.

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image Planning Reminder
Project Your Income
When planning substantial donations that may exceed the annual ceiling, make a projection of your income for at least five years. Although the carryover period of five years will probably absorb most excess donations, it is possible that the excess may be so large that it will not be completely absorbed during the year of the contribution and the five-year carryover period. It is also possible that your income may drop in the future so that you cannot adequately take advantage of the excess.
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EXAMPLE
In 2012, you contribute to a university stock held over a year with a fair market value of $19,000. The contribution is subject to the 30% ceiling for capital gain property (14.17). You also have a $2,000 carryover from 2011 for a cash gift to your church subject to the 50% ceiling. Your 2012 adjusted gross income is $40,000. Under the 30% ceiling, the deduction for the contribution of stock is limited to $12,000 (30% of $40,000 adjusted gross income). Since the overall deduction limit is $20,000 (50% of $40,000 adjusted gross income), the $2,000 carryover from 2011 is fully deductible. The total deduction on your 2012 return is $14,000 ($12,000 plus $2,000 carryover). You carry over to 2013 the $7,000 balance from the gift of stock that was subject to the 30% ceiling.
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