Contributions to a private nonoperating foundation may qualify for the benefit of the 50 percent contribution deduction limit, and donors may deduct the full value of appreciated property, if the private nonoperating foundation: Distributes an amount equal in value to 100 percent of all contributions received in the tax year by the 15th day of the 3rd month after the close of its tax year, Has no remaining undistributed income for the year, and Distributes only qualifying distributions that are treated as distributions out of corpus. Qualifying distributions cannot be made to: An organization controlled directly or indirectly by the foundation or by one or more disqualified persons, or A private foundation that is not an operating foundation. To qualify for the 50 percent contribution deduction, the organization must distribute all contributions received in any year, whether of cash or property. Distributions will be treated as made first out of contributions of property and second out of cash contributions received by the foundation during the year, to qualify for the deduction of the full value of appreciated property. A private foundation is not required to trace specific contributions of property, or amounts into which those contributions are converted, to specific distributions. A private foundation may choose to treat part or all of one or more distributions, made by the 15th day of the 3rd month after the close of the year, as made out of corpus. The choice is discussed under treatment of qualifying distributions. The fair market value of contributed property, determined on the date of the contribution, generally must be used to determine whether an amount equal to 100 percent of the contributions received has been distributed. If the property is sold, the foundation may reduce the property's fair market value by any reasonable selling expenses incurred. The foundation must distribute the balance of the fair market value of the property that was sold to meet the 100 percent distribution requirement. However, if within 30 days after receiving the contributed property, the foundation sells the property or distributes the property to a public charity, the foundation may choose to treat either -- The gross amount received on the sale, minus reasonable selling expenses incurred, or The fair market value of the contributed property at the date of its distribution to the public charity as the fair market value for purposes of the 100 percent distribution requirement. A taxpayer claiming a deduction for a charitable contribution to a private nonoperating foundation must get adequate records or other sufficient evidence from the foundation showing that the foundation made the required qualifying distributions in the time prescribed. Records or other evidence must be attached to the taxpayer's return for the tax year the charitable contribution deduction is claimed. The foundation must attach a statement to its Form 990-PF, Return of Private Foundation PDF, for the year in which distributions are made, for the donor to claim a full fair market value deduction. See the instructions to Form 990-PF PDF for additional information. Return to Life cycle of a private foundation