Charles H. Browning, Jr., and Patricia L. Browning - Page 1

                                   109 T.C. No. 16                                    

                               UNITED STATES TAX COURT                                

           CHARLES H. BROWNING, JR., AND PATRICIA L. BROWNING, Petitioners            
                   v. COMMISSIONER OF INTERNAL REVENUE, Respondent                    

               Docket Nos. 16336-94, 20287-95.     Filed November 25, 1997.           

                    H county has a program to preserve farmland by                    
               purchasing development rights from landowners.  Under                  
               that program, Ps conveyed an easement to the county in                 
               consideration of a cash downpayment and an installment                 
               note.  Ps claimed a charitable contribution on the                     
               basis that they had made a “bargain sale” of the                       
               easement to the county.  The consideration received by                 
               Ps from the county was consistent with consideration                   
               paid by the county to other participating landowners                   
               under the program.  Relying on sec. 1.170A-14(h)(3)(i),                
               Income Tax Regs., R argues that evidence of                            
               consideration paid by the county under the program is                  
               determinative of the fair market value of the easement.                
                    Held:  Because Ps have shown that the market                      
               created by the county under the program was populated                  
               by sellers intending to make gifts to the county and                   
               was not determinative of fair market value, Ps are                     
               entitled to present evidence of the fair market value                  
               of their land before and after the conveyance of the                   

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