R. Edwin Brown and Winsome S. Brown - Page 2

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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               

          to the Tax Court Rules of Practice and Procedure, unless                    
          otherwise indicated.                                                        

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