Can anybody explain "charitable contributions" in the first sentence and "charitable contributions" in the second one for me, please? Are they the same thing? Why does IRS allow in the first sentence, but "he wouldn't be able to use a carryforward" in the second one. Is that because the amount of money he's giving away is TOO BIG? I am confused.

"The IRS allows charitable contributions in excess of the 50% limit to be carried forward for up to five years, but Buffett has never carried a deduction forward, and says he never will. In the case of charitable contributions, since he's donating billions of dollars every year, he wouldn't be able to use a carryforward even if he wanted to at this point."

source: http://www.businessinsider.com/things-we-learned-about-warren-buffetts-taxes-2016-10

  • 1
    Sounds like a buzzword for donation. Oct 17, 2016 at 10:59
  • Money given for charity.
    – V.V.
    Oct 17, 2016 at 11:00

1 Answer 1


You phrase

charitable contribution

means the same thing in both sentences and is specific to the tax code.

A charitable contribution is the donation of something (an asset which can be valued) to an organization which has 501(c)3 IRS tax code status. The donation can be cash, cash equivalents, cars, houses, etc.

The donor is allowed to deduct the "net" amount (minus any goods or services received) of the donation.

Your understanding is correct, that the amount that Buffet would be able to deduct is too big, it could mean the expectation is he will die before he has a chance to realize the full deduction
("even if he wanted to"). It is not that the IRS is disallowing it in the second sentence.

When Buffet dies, he would not be able to transfer his deduction to any people or even his own charitable organization.

  • I've just edited my question, pls help me again :-).
    – haile
    Oct 17, 2016 at 11:06
  • +1 But I think it's not that Buffet will die before he can take the carryforward -- it's that he gives more than the limit every year, so there's no margin to apply the carryforward to. Oct 17, 2016 at 12:56

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