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closely analogous to such a gift. However, an undivided interest is by definition a partial interest in an entire group of items of property without any division or segregation. See Blacks Law Dictionary, p. 1697. In the case of a collection of papers, owning an undivided interest in the collection would amount to partial ownership of each piece of paper.

Gifts of undivided interests have been upheld by the courts in various circumstances. See Berl v. Rosenberg, supra, at 977. In such cases, of course, since each owner owns a part of each piece of paper (or other property), no further segregation or identification is possible since the reference is to a part of each piece of paper; however, the property subject to the undivided interest itself must be specifically identified, and the extent and nature of the interest must be clearly understood by the donor and the donee. See Collins v. McCanless, 169 S.W. 2d 852 (S. Ct. Tenn. 1943).

Effect of the Presidential Libraries Act

The brief submitted by the President's representatives states that the Presidential Libraries Act represents "an effort to encourage and facilitate the donation of Presidential papers." From this statement, the representatives argue that "[t]he Act does not supplant the common law gifts, but it is a vital consideration in determining under common law whether the 1969 gift was effective. . ."

The legislative history of the Presidential Libraries Act, as most recently enacted in 1955, does indicate that the purpose of the Act was to encourage Presidents to donate their papers to the Federal Government. Prior to 1955, the GSA did have authority to accept Presidential papers for safekeeping but had no general authority to accept title to such papers or to construct or accept buildings for Presidential libraries. (See Senate Report No. 1189 on H.J. Res. 330, 84th Congress, 1st Session 1955.) In 1955, the library was being built to house President Truman's papers and initial plans were being made to establish a library for President Eisenhower. These initiatives provided the impetus to expand the GSA's authority.

The Act further sought to encourage donations by allowing the Administrator of the GSA to accept gifts subject to restrictions on access to those papers deemed sensitive or personal by the donating Presidents. In this way, it was hoped that Presidents would not be deterred from making gifts by the possibility that personal or sensitive papers would be made public.

The two purposes of the Act discussed above were made clear in the Senate Report:

"This resolution would make possible an effective and systematic procedure for the preservation and use of Presidential papers when accepted by the Administrator of the General Services as gifts of the United States for the purpose of establishing an archival depository. It would enable the President and former Presidents of the United States to plan for the preservation of their papers at the place of their choice, under agreements which would insure that the Government would make adequate provision for receiving, preserving and administering them within

the necessary and appropriate restrictions which recognize and protect the President's rights."

The legislative history thus explicitly states the major purposes of the Act. The staff has found no indication in any part of the legislative history that the Act was intended to alter or in any way to affect significantly the common law requirements for a valid gift. Furthermore, the staff found no reference in any portion of the legislative history to the possibility of income tax deductions for donations of Presidential papers or to the incentive that such deductions might provide. Thus, the staff believes that the Presidential Libraries Act does not in any way affect the common law requirements for a valid gift or the Internal Revenue Code requirements for obtaining an income tax deduction for such gifts.

GSA procedures

C. IS A DEED NECESSARY FOR A GIFT?

GSA procedures, set out in the Presidential Libraries Manual (Exhibit I-5), contemplate that deeds will be used to convey gifts to GSA. However, neither the GSA governing statute (44 U.S.C. §§ 2101-2114) nor GSA published regulations (41 C.F.R., part 105– 161) require that a gift be made only by deed. Section 2107 of Title 44 provides the authority for GSA to accept gifts "for deposit" (which includes the authority to accept title to gift property):

"When the Administrator of General Services considers it to be in the public interest he may accept for deposit

"(1) the papers and other historical materials of a President or former President of the United States, or other official or former official of the Government, and other papers relating to and contemporary with a President or former President of the United States, subject to restrictions agreeable to the Administrator as to their use; and

"(2) documents, including motion-picture films, still pictures, and sound recordings, from private sources that are appropriate for preservation by the Government as evidence of its organization, functions, policies, decisions, procedures, and transactions. Moreover, the GSA has indicated (in response to questions by Senator Weicker concerning the procedures contemplated in its Handbook, see Congressional Record, December 12, 1973, S 22644) that the procedures are "guidelines" rather than "formal published regulations, having the force and effect of law." GSA explained further that "in the interest of retaining our options for receiving gifts of papers that are invaluable in constructing a documentary history of our nation, we have deliberately chosen not to issue regulations that might restrict or hinder all possible means of donation." Prior to its amendment in 1955 the statute specified that the restrictions had to be in writing.

Use of a deed

It is clear that common law does not require gifts to be made by deed. See Brown on Personal Property, supra, pp. 75-76. However,

if a gift is to be restricted in any way or if any rights are to be retained by the donor, some expression of the restrictions must be conveyed. to the donee before the gift is valid. See Johnson v. Clark, 23 Misc. 346, 51 NYS 238 (1936). Such restrictions may be expressed orally or through some written document. See L. A. Gagne, 16 T.C. 498 (1951). Nonetheless, some expression of the restrictions or retained rights must be communicated so that the donee can explicitly accept the gift subject to those restrictions or retained rights.

Of course, a gift may be made by deed under the common law. See generally, Brown on Personal Property, § 42, pp. 118-126. But where gifts are made by deed, the gifts must meet the same requirements of intent, delivery and acceptance which apply to gifts generally. See Smith v. Smith, 313 S.W. 2d 753 (Kansas Court of Appeals, 1958). If a deed describing the subject property is signed by the donor (or his duly authorized agent), delivered to the donee, and accepted by the donee, the common law requirements of intent, delivery and acceptance are generally met, and the gift is valid. But where the gift is to be effected by deed (as, for example, where the donor fails to deliver the subject property and to relinquish dominion and control over it) it is a "fundamental principle of law" that the deed "must be delivered." In other words, "it is delivery that gives the deed force and effect." See Estate of John W. Mortimer, 17 T.C. 579, 583 (1951). Moreover, before there can be a completed delivery of the deed, the donee must accept it. See Ibid. In Mortimer, the Tax Court held that gifts of property were invalid where the deed had been signed and recorded but was retained by the donor, who continued to collect rent on the property in question. In addition, the court pointed out that the donees could not accept the gifts, for they "had no knowledge of the execution of the deeds. or that decedent had any intention of giving them the properties." To much the same effect is Kate R. De Forest, 27 B.T.A. 373 (1932), where the Tax Court held that a gift of securities was incomplete where the donor had signed the deed but retained it.

D. LAW RELATING TO GIFTS OF FUTURE INTERESTS

Individuals making gifts of property often desire to restrict the ways in which the donee can use the gift property, or to retain for themselves certain rights for control or use of gift property. These restrictions and retained rights are a matter of agreement between the donor and the donee, and whatever the nature of the restrictions and retained rights, they can in most cases be enforced through common law courts (in a manner similar to the enforcement of contracts).

However, when the disputed issues relating to a gift involve gift tax es due or possible income tax deductions allowed, the nature and extent of any restrictions and retained rights become vitally important. Restrictions and retained rights can substantially affect the value of any gift and thus affect the size of any gift tax or any income tax deduction. More fundamentally, if the restrictions on the donee's use and the rights retained by the donor are both substantial, the donor rather than the donee may still be the party who primarily can use and enjoy the property. In such cases, the tax law does not allow

an income tax deduction because in substance no real gift has been made. Thus, in applying the tax laws to any gift, agreements accompanying the gift which restrict the donee's use of the gift property or which retain rights in the donor must be closely examined.

The Internal Revenue Code does not allow an income tax deduction for gifts of future interests until the intervening interests expire. Section 170(a)(3) of the Code states in part that a charitable contribution which consists of a "future interest in tangible personal property shall be treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the taxpayer or those standing in a relationship to the taxpayer described in section 267 (b)."

This provision was adopted as part of the 1964 Revenue Act. The Ways and Means Committee report described the type of gift arrangement which the legislation was intended to affect: 6

"The attention of your committee has been called to cases where pictures or art objects are given to museums, but the gift. takes effect at some future time, usually based on the life of the contributor or someone else. In the meanwhile, the use of the pictures or art objects is retained in much the same manner as if the contribution of the future interest had not been made. The same enjoyment would occur, for example, if instead of making a gift of a future interest, the taxpayer were to wait until his, or his family's, use of the property was completed. If this use was completed at the time of his death, however, no charitable contribution for income tax purposes could be claimed even though an estate tax deduction could be available."

The committee report shows that it intended to prevent income tax deductions in cases where a donor has transferred the title to property to a charity, but has retained such rights in the property that the donor effectively continued to enjoy substantially full use of the property.

Although the statute and the legislative history do not indicate what type of an interest was intended to constitute a "future interest" or what type of property is to be considered "tangible personal property," the regulations do define "future interest." Treasury Regulation § 1.170-1(d) (2) states that:

"The term 'future interest' includes situations in which a donor purports to give tangible personal property to a charitable organization, but has an understanding, arrangement, agreement, etc., whether written or oral, with the charitable organization which has the effect of reserving to, or retaining in, such donor a right to the use, possession, or enjoyment of the property." The regulations provide no definition of the term "tangible personal property." This definition is crucial to any future interest question involving gifts of papers because such papers can represent both tangible personal property (i.e., the piece of paper itself) and intangible personal property (i.e., some kind of literary or intellectual rights in such papers). If the restrictions and retained rights affect only intangible property rights, section 170(a)(3) is inapplicable and an

House Rept. No. 749, 88th Congress, 1st Session, p. 55.

income tax deduction is allowed for the gift. For example, a donor may be able to give a book he has written to a university or other charity and retain for himself the copyright in the book (i.e., the donee can use the book for its own purposes, but cannot publish the book). Such a retained right affects only the intangible personal property, does not make the gift one of a future interest in tangible personal property, and thus the gift is not affected by section 170(a) (3). Since the regulations do not define tangible personal property rights as opposed to intangible personal property rights, the common law on this question must be examined. The leading writers on intangible property rights state that the only such right recognized by the courts is the common law copyright. See 1 Nimmer, Copyright § 48 (1963). A common law copyright permits the writer of a document to have a limited right to prevent others from publishing his document and in some cases allows him to publish it himself after it has left his possession. See Note, Personal Letters: In Need of a Law of Their Own, 44 Ia. L. Rev. 705, 711 (1959). As a result, any rights or restrictions on a gift which relate to a copyright will not present a problem under section 170(a) (3). But, if restrictions go beyond that, the restrictions must in fact relate to the tangible personal property and thus run the risk of making a gift one of a future interest in tangible personal property for which no deduction can be taken under section 170(a)(3).

E. WHO OWNS PRESIDENTIAL PAPERS

A question that has been raised in connection with President Nixon's gift of his pre-Presidential papers is whether he actually owns the papers generated during his public career. If the papers were considered to be public property rather than personal property, the President would not, of course, be permitted to take a charitable contribution deduction for the donation of any of these papers. The staff has, therefore, examined the question whether the papers of a President are appropriately considered public papers.

Since the time of George Washington it has been customary for Presidents of the United States to treat their papers as their own personal property. In addition, Congress by action in this area has suggested that it agrees with this view. In 1950, Congress enacted the Federal Records Act (64 Stat. 583) which provides for the deposit of personal papers of Presidents of the United States. The Act specifically provided that the Administrator of GSA may accept for deposit "the personal papers and other personal historical documentary materials of the present President of the United States." This Act is now known as the Presidential Libraries Act (44 U.S.C. 2101 et seq.). As far as the staff can determine, this custom of treating papers generated during a public career as personal property has been followed in the case of public officials generally. As a result, the staff believes that the historical precedents taken together with the provisions set forth in the Presidential Libraries Act, suggest that the

7 An analysis of the common law of intangible property rights and of the entire future interest question has been provided to the staff by L. Hart Wright, Professor of Law at the University of Michigan. The analysis is set out in full in Exhibit I-4. Its conclusions agree with those of the staff.

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