Exogeneity vs. Endogeneity in Section 170’s Quid Pro Quo Test

8 Pages Posted: 24 Oct 2018 Last revised: 2 Dec 2019

See all articles by Timothy M. Todd

Timothy M. Todd

Liberty University School of Law

Date Written: 2018


This article advances an exogenous-endogenous distinction for purposes of determining and calculating quid pro quos under section 170. This test holds that exogenous benefits — benefits that arise independently of, or arise outside of, the taxing authority — are properly considered quid pro quos (and should reduce the amount deductible); whereas, endogenous benefits — benefits that arise from or within the specific federal or state taxing authority — are not quid pro quos and should not be considered in determining the amount deductible under section 170.

The exogenous-endogenous distinction advanced by this article comports with the policy and intent of section 170, provides a way to demarcate quid pro quos in a consistent manner (irrespective of donee), and clarifies why section 170 need not consider the federal tax benefit associated with it, but must consider any associate state tax benefit.

Keywords: tax, charity, charitable deduction, SALT, SALT deduction, state and local, TCJA, SALT workaround

JEL Classification: K1, K00, K19, K2, K29, K34

Suggested Citation

Todd, Timothy M., Exogeneity vs. Endogeneity in Section 170’s Quid Pro Quo Test (2018). State Tax Notes, Vol. 90, pp. 37-44, Oct. 1, 2018, Tax Notes, Vol. 161, pp. 65-72, Oct. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3268089

Timothy M. Todd (Contact Author)

Liberty University School of Law ( email )

1971 University Boulevard
Lynchburg, VA 24515
United States

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