SECTION 1. OVERVIEW

This notice announces that the Internal Revenue Service (Service) and the Treasury Department are studying the computation of the deductible amount and adjustment to cost of goods sold for charitable contributions of inventory property that constitute qualified contributions as defined in § 170(e)(3)(A) of the Internal Revenue Code.

The Service and the Treasury Department are aware that some taxpayers making qualified contributions may, because of the income limitation of § 170(b)(2), prefer to apply the provisions of § 170(e)(1) and § 1.170A–1(c) of the Income Tax

Regulations rather than the provisions of § 170(e)(3) and § 1.170A–4A(c).