Capital gains tax

When a tax payer is donating a property that has appreciated in value, a capital gains tax is involved. Income from charitable contribution of appreciated property may not be subject to capital gains tax.

Donating appreciated assets

Donating appreciated assets means donating property or securities or art that has appreciated in value and is worth more than you paid for it. 

Holding period for capital gains tax break

If you have owned the property or asset that you are donating to charity for more than 18 months, you pay no tax on the capital gains (no capital gains tax). In this case a long term capital gains tax is involved.

Charitable contributions of private foundations

This is also true for contributions to private foundations if the charitable contributions are made before June 30, 1998. Charitable contributions of appreciated property to public charities continue to escape the capital gains tax you would pay if you sold the property instead of contributing it to a charity.