Property is ordinary income property if the property’s owner would have recognized ordinary income or short-term capital gain had it been sold at fair market value on the date it was contributed to a charitable organization. Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets held 1 year or less.

Amount of Charitable Deduction - The amount deductible for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if the property were sold for its fair market value. Generally, this rule limits the deduction to the taxpayer’s basis in the property.