REASSESSING THE TAX-FAVORED STATUS OF THE CHARITABLE DEDUCTION FOR GIFTS OF APPRECIATED ASSETS

This paper analyzes the tax-favored status of charitable donations of appreciated assets using data from the 1985 Statistics of Income indiv idual tax file. The efficiency of favored tax treatment of charitable donations is analyzed by estimating separate price elasticities for to tal, cash, and property contributions The results indicate that wealth y donors (those whose positive income exceeds $200,000) are responsive to the tax-favored status of charitable donations of appreciated prop erty, while taxpayers who are not considered wealthy are price inelast ic. These findings indicate that the tax-favored status of property do nations made by other than wealthy taxpayers should be reassessed.