58
INTERNAL REVENUE CODE OF 1954
SEC. 170. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS. (a) A L L O W A N C E OF DEDUCTION, — (1) GENERAL RULE.—There shall be allowed as a deduction any
charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary or his delegate. (2) CORPORATIONS ON ACCRUAL BASIS.—In the case of a corporation reporting its taxable income on the accrual basis, if— (A) the board of directors authorizes a charitable contribution during any taxable year, and (B) payment of such contribution is made after the close of such taxable year and on or before the 15th day of the third month following the close of such taxable year, then the taxpayer may elect to treat such contribution as paid during such taxable year. The election may be made only a t the time of the filing of the return for such taxable year, and shall be signified in such manner as the Secretary or his delegate shall by regulations prescribe. (b) LIMITATIONS.—
(1) INDIVIDUALS.—In the case of an individual the deduction provided in subsection (a) shall be limited as provided in subparagraphs (A), (B), (C), and (D).^ (A) SPECIAL RULE.—Any charitable contribution to— (i) a church or a convention or association of churches, (ii) an educational organization referred to in section 503 (b)(2), or (iii) a hospital referred to in section 503(b)(5), shall be allowed to the extent that the aggregate of such contributions does not exceed 10 percent of the taxpayer's adjusted gross income computed without regard to any net operating loss carryback to the taxable year under section 172. (B) GENERAL LIMITATION.—The total deductions under subsection (a) for any taxable year shall not exceed 20 percent of the taxpayer's adjusted gross income computed without regard to any net operating loss carryback to the taxable year under section 172. For purposes of this subparagraph, the deduction under subsection (a) shall be computed without regard to any deduction allowed under subparagraph (A) b u t shall take into account any charitable contributions to the organizations described in clauses (i), (ii), and (iii) which are in excess of the amount allowable as a deduction under subparagraph (A). (C) UNLIMITED DEDUCTION FOR CERTAIN INDIVIDUALS.—The
limitation in subparagraph (B) shall not apply in the case of an individual if, in the taxable year and in 8 oi the 10 preceding taxable years, the amount of the charitable contributions, plus the amount of income tax (determined without regard to chapter 2, relating to tax on self-employment income) paid during such year in respect of such year or preceding taxable years^ exceeds 90 percent of the taxpayer's taxable income for such year, computed without regard to— (i) this section, §170
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