Gifts/Contributions - Deductibility of gifts purchased more than 12 months prior to gifting

Is a taxpayer entitled to a deduction under section 30-15 of the Income Tax Assessment Act 1997 (ITAA 1997) for gifting property which was purchased more than 12 months prior to gifting?

Yes. The taxpayer is entitled to a deduction under section 30-15 of the ITAA 1997 provided the value of the property purchased more than 12 months prior to gifting is valued by the Commissioner of Taxation at more than $5,000.

The taxpayer is the executor of a deceased estate. As the executor, the taxpayer has made a gift of the deceased's property to a higher education institution after 1 July 1999.

The property was purchased by the deceased more than 12 months prior to the executor gifting the property to the higher education institution.

The property is not trading stock of the deceased.

The higher education institution qualifies as a fund, authority or institution to which deductible gifts or contributions can be made.

The property to be gifted has not been valued by the Commissioner of Taxation.

Division 30 of the ITAA 1997 provides an income tax deduction for gifts or contributions made to a fund, authority or institution.

Section 30-15 of the ITAA 1997 provides for the types of gifts or contributions which are deductible. The deductible gifts or contributions are: • money; or • property (including trading stock of the donor) that the taxpayer purchased during the 12 months before making the gift; or • property valued by the Commissioner of Taxation at more than $5,000.

As the property to be gifted was purchased more than 12 months prior to gifting, the property is a deductible gift if it is valued by the Commissioner of Taxation at more than $5,000.

Accordingly, the taxpayer must seek a valuation of the property from the Commissioner of Taxation and if the Commissioner's valuation is more than $5,000, then the property is a deductible gift. The amount deductible to the taxpayer is the value of the property as determined by the Commissioner as prescribed by item 1(d) in the "How much you can deduct" column of section 30-15 of the ITAA 1997. Note: The procedures for having property valued by the Commissioner of Taxation are set out in Regulations 30-212.03, 30-212.04 and 30-212.05 of the Income Tax Regulations 1997.