- 14 - Issue 2. Charitable Contribution Deduction Respondent argues that petitioners are not entitled to a charitable contribution deduction because the amount of the encumbrance exceeded the fair market value of the property at the time of the transfer. Petitioners argue that they should be allowed a charitable contribution deduction for the projected income stream associated with the lease. A taxpayer may make a charitable contribution by selling or disposing of property to a charity for less than its fair market value. Estate of Bullard v. Commissioner, 87 T.C. 261, 265 (1986). The amount of the charitable contribution resulting from such a “bargain sale” generally is the excess of the fair market value of the property over its sale price. Id.; Stark v. Commissioner, 86 T.C. 243, 255-256 (1986); Knott v. Commissioner, 67 T.C. 681 (1977); Waller v. Commissioner, 39 T.C. 665, 677 (1963). Furthermore, to the extent that the fair market value of property contributed exceeds the debt on the property, taxpayers are entitled to a charitable contribution deduction. Guest v. Commissioner, supra at 25. A taxpayer has the burden of proving the amount of a charitable contribution that he or she may deduct. Rule 142(a); Guest v. Commissioner, supra; Lamphere v. Commissioner, 70 T.C. 391 (1978). Section 1.170A-1(c)(1), Income Tax Regs., provides that the amount of a charitable contribution of property other than money is the fair market value of the property at the timePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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