R. Edwin Brown and Winsome S. Brown - Page 15

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          of the contribution subject to certain reductions.  Section                 
          1.170A-1(c)(2), Income Tax Regs., defines fair market value as              
          “the price at which the property would change hands between a               
          willing buyer and a willing seller, neither being under any                 
          compulsion to buy or sell and both having a reasonable knowledge            
          of relevant facts.”                                                         
               Petitioners offered virtually no evidence regarding the fair           
          market value of the computer and lease.  The School received                
          lease payments on the Master Lease, but there is no proof that              
          those amounts were contributed by petitioners.  Petitioners did             
          not contribute any cash to the School.  Nor did petitioners                 
          report as income any of the lease payments received by the                  
          School.  Moreover, petitioners have not offered proof on the                
          projected income stream, if any, with respect to the lease of the           
          computer equipment.                                                         
               Petitioners have not proven that the fair market value of              
          the contributed property was in excess of the debt assumed.                 
          Accordingly, we hold that petitioners are not entitled to a                 
          charitable contribution deduction.                                          
          Issue 3. Section 6662 Substantial Understatement Penalty                    
               Respondent determined that petitioners are liable for the              
          section 6662(a) penalty for 1990.  Petitioners argue that there             
          was substantial authority for the position taken on their return.           
          Furthermore, petitioners argue that the complexity of the matter            

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