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Heres another thought regarding charitable contributions of assets: The tax code allows a deduction of the fair market value of a donation of appreciated property to a charitable organization, if certain rules are met. Assume I have a painting that I bought many years ago from a starving artist for $200. That artist became famous, and the painting is now worth $20,000. Assume my AGI is $80,000. I donate it to a museum for their permanent collection, and may be able to deduct a $20,000 contribution on Schedule A as an itemized deduction. In other words, I enjoy a deduction that includes the benefit of the appreciation in value without needing to recognize the $19,800 gain as income. Lets contrast that to a contribution to a charity of your time and efforts. You'll remember that people cannot deduct the value of their labor donated to charitable organizations. The rational is that the person has not recognized the income on the labor, so cannot take a deduction for the value of their labor. That is perhaps more analogous to the situation where someone can deduct the FMV of an item contributed to a charity, rather than their basis. Is there a difference between people donating their labor to charity versus donating an item to a charity? Certainly much harder to measure and document. There would need to be a standard "labor" rate, and charities would need to track the time and issue a 1099-L (I just made that one up!) for value of donated labor, but many charities already track the number of volunteer hours for fundraising purposes anyway. The current tax code allows a deduction for the fair market value of an item donated to charity without the taxpayer needing to recognize the capital gain. Is that really any different than allowing a deduction for the time donated, without the taxpayer recognizing the income foregone? As you study and work in taxes during your career, think about the implicit messages and values imbedded in the tax code. Would more people be encouraged to volunteer time to their communities and organizations if they could realize a tax benefit? Thoughts anyone?

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