G.2. Sale or Other Dispostion of Donated Property
     January 1989

Development Policy and Administration Manual 
Chapter III. Gift Administration Policy 
Section G. Return and Sale or Other Dispostion of Donated         
           Property 
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               SALE OR OTHER DISPOSITION OF DONATED PROPERTY


From time to time, items of University property acquired by gift
lose their usefulness and circumstances arise in which they might
be sold, traded, or otherwise disposed of in order to acquire
other items of greater usefulness in fulfilling the purpose and
intent of the original gift.

The University is legally bound to fulfill the terms and
conditions of any gift, as specified by its donor, before any
disposition is made.  Therefore, the original gift terms must be
reviewed to determine whether the language, either expressly or
by implication, prohibits disposition of the donated property. 
Questions of interpretation should be referred to General Coun-
sel.  In the absence of such restriction, disposition in accor-
dance with established University policy for the disposition of
surplus property is legally permissible.

However, three other factors should be considered before donated
property is disposed of:

     --   For items of tangible property, (e.g., books,
          equipment, objects of art), disposition while the
          donor's tax return for the year of the gift is still
          open to audit (normally three years from the filing
          date) could cause a reduction in the amount of the
          donor's charitable tax deduction.  To avoid such an
          untoward result, Development Policy and Administration
          or General Counsel should be consulted whenever
          disposition of a gift of tangible property is being
          considered within two years after the date of gift. 

     --   Consideration should be given to whether consultation
          with the donor, the donor's family, or friends is
          needed to insure that relations with them will not be
          adversely affected by the proposed disposition.

     --   Finally, the Tax Reform Act of 1984 requires the
          University to file a Donee Information Return (Form
          8282) with the Internal Revenue Service whenever it
          disposes of gifts valued in excess of $5,000 (including
          tangible property, real property, and nonpublicly
          traded stock) within two years of its receipt (see
          Section IV: C.4).


Gifts of real property can be disposed of only by action of The
Regents or, in limited cases, by the President.