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imprinted on the product or its container. The products may
not be legally sold after the expiration date.
Shortly before the expiration date of products that
ordinarily were sold by X for 10x dollars, X made a qualified
contribution of such products within the meaning of section
170(e)(3)(A) of the Code. On its Federal income tax return, X
claimed a deduction of 10x dollars for this contribution. At
the time of the donation, if X had sold the products in the
usual market in which it sold such products, X would have
realized only 5x dollars. X could not reasonably have been
expected to realize its usual selling price for the products due
to the imminence of the expiration date after which the products
could not be sold legally. X's basis in the products was 1x
dollars. [Rev. Rul. 85-8, 1985-1 C.B. at 59.]
It will be seen that under the postulated facts an "expiration
date" was required, presumably by law, and the products could not be
legally sold after the expiration date. In the case before us an
expiration date was not a legal requirement, nor is there any legal
impediment related to the expiration date. We recognize, of course,
that market forces would no doubt impose a practical impediment to
retail sales after the date on the Kwik Lok, except at a substantial
discount at thrift stores or on discount racks.
The ruling assumes that because the expiration date was
imminent, "X could not reasonably have been expected to realize its
usual selling price ". Id. We think our case is different. Here,
we are dealing with donations of rapidly perishable inventory which
petitioner had on hand for sale for a very short time, so that the
bread donations on the pull date--the day before the date code
expiration date--have to be viewed in a context different from that
of the ruling. This was not inventory which had been on hand for a
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