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The issues for decision are: (1) Whether the amount of debt
outstanding on certain computer equipment contributed to the
Barnesville School is includable in the amount realized by
petitioners from the transaction. We hold the debt is includable
in the amount realized. (2) Whether petitioners are entitled to
a charitable contribution deduction for computer equipment and
lease rights contributed to the Barnesville School. We hold they
are not. (3) Whether petitioners are liable for an accuracy-
related penalty under section 6662(a) due to substantial
understatement of income tax. We hold they are liable.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioners resided in Dickerson, Maryland.
Petitioners are married and filed a joint Federal income tax
return for the year in issue. Since petitioner husband entered
into the transaction at issue, the term “petitioner” refers to R.
Edwin Brown.
On July 2, 1985, Federal Data Corp. (hereinafter FDC)
entered into a Non-Recourse Loan and Security Agreement with and
executed a promissory note to the Old Stone Bank (hereinafter
(...continued)
to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated.
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