August 9, 2001 | Read Time: 1 minute
Broadcasting companies may be less interested in donating old news footage to charity now that the I.R.S. has ruled that one company’s donations do not qualify for a charitable deduction.
The case involved a broadcasting company that periodically passed on clips of local news stories to a charity. The revenue service said that the charity used them as part of its mission, but it did not give any specifics about the type of charity or the way in which the clips were used.
The question for the I.R.S. was how to categorize the news footage: Was it a “capital asset,” such as furniture or computers, which could be deducted as a charitable gift at its full market value? Or did it fall into another category that would limit the potential value of a charitable deduction?
The I.R.S. decided that the films were a “corporate archive” — a collection of information and an institutional record. Therefore, the company could take a charitable deduction only for its own cost in making the films, the I.R.S. said, and not for the films’ market value.
As is its policy, the I.R.S. did not identify the charity or company involved in the ruling (Technical Advice Memorandum 200119005).
