- 146 -
C. Deduction for Charitable Contribution Claimed for
Property Transferred to Kenyon College
On the 1979 income tax return petitioner claimed a
charitable contribution deduction in the amount of $657,000
arising out of real estate donated to Kenyon College. This
deduction was reduced to zero in the notice of deficiency by
ordinary income realized.
The claimed charitable contribution consisted of property
owned by the McZand Corporation, a subchapter S corporation, and
listed on its tax return as being acquired for the following
amounts and on dates of purchase indicated:
Land Date Amount
Stoneridge Land 09/77 $511,000
Westgrove Land 05/78 438,000
Pickerington Land 05/78 411,000
The $657,000 amount of the charitable contribution claimed
by petitioner was calculated by determining that the fair market
value of the Stoneridge, Westgrove, and Pickerington tracts was
$1,360,000 (the sum of the properties' costs) less mortgages of
$703,000 for a net value after debt of $657,000.
The McZand Corporation was involved in real estate
development. Initially, petitioner and his children owned 50
percent of McZand Corporation's stock, and David William McCabe,
in his individual capacity or as custodian for his children,
owned the remaining 50 percent. Subsequently, on October 22,
Page: Previous 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 NextLast modified: May 25, 2011