Treasury Department Opinion on the
Acceptance of Gifts for the ARS Trial Gardens
U. S. TREASURY DEPARTMENT
WASHINGTON
OFFICE OF COMMISSIONER OF INTERNAL. REVENUE
September 29, 1950
AMERICAN RHODODENDRON SOCIETY
538 MEAD BUILDING
PORTLAND, OREGON
Gentlemen:
Reference is made to a letter dated July 28, 1950, from Bruce Yergen in which request is made for ruling relative to the deductibility of contributions to the Rhododendron Test Garden Fund in the income tax returns of the Donors.
The information submitted discloses that the Rhododendron Test Garden Fund was established for the purpose of establishing a test garden for the propagation of rhododendrons, azaleas, and other plants of the Heath family on Crystal Springs Lake Island located in East Moreland Park, a public park owned and maintained by the City of Portland for the public enjoyment and use of its citizens and others. You submit a copy of the City of Portland Ordinance No. 91841 authorizing the establishment of the test garden and a copy of the agreement dated June 15, 1950, between the City of Portland and you setting forth the conditions under which the garden shall be constructed and maintained and the manner in which it shall be used. It is stated that funds for the establishment of the garden will be used exclusively for the expenses of establishing the garden.
It is the opinion of this office. based upon the evidence presented, that if the Rhododendron Test Garden Fund is used exclusively for the purpose of establishing the test garden, contributions to it will be deductible by the donors in computing their taxable net income in the manner and to the extent provided by section 23 (o) and (q) of the Internal Revenue Code, as amended.
Inasmuch as the actual activities of the Fund over a period of time sufficient to disclose clearly its method of operation are a material factor in determining its status for Federal income tax purposes, you should, after the first complete year of operation, file with the collector of internal revenue for your district in behalf of the Fund an appropriate exemption affidavit completely filled out and accompanied by a classified statement of receipts and expenditures for the Fund for the year and a complete statement of assets and liabilities as of the end of the year.
By direction of the Commissioner.
Very truly yours,
/S/ C. W. Stowe
Acting Deputy Commissioner