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must be subtracted from that figure to determine properly the
amount of the charitable contribution.2
IV. Analysis of the Fair Market Value of the Easement
A. Introduction
A bargain sale is a transfer of property that is in part a
sale or exchange and in part a gift. See section 1.1001-1(e)(2)
Example (3), Income Tax Regs., which provides as follows:
A transfers property to his son for $30,000. Such
property in A’s hands has an adjusted basis of $30,000
(and a fair market value of $60,000). A has no gain
and has made a gift of $30,000, the excess of $60,000,
the fair market value, over the amount realized,
$30,000.
Where the bargain sale is to a charitable organization, the gift
generally constitutes a charitable contribution. See sec.
2 It should be noted that, in making the alternative argument,
respondent does not rely on the following sentences of sec.
1.170A-14(h)(3)(i), Income Tax Regs.:
If, as a result of the donation of a perpetual
conservation restriction, the donor or a related person
receives, or can reasonably expect to receive,
financial or economic benefits that are greater than
those that will inure to the general public from the
transfer, no deduction is allowable under this section.
However, if the donor or a related person receives, or
can reasonably expect to receive, a financial or
economic benefit that is substantial, but it is clearly
shown that the benefit is less than the amount of the
transfer, then a deduction under this section is
allowable for the excess of the amount transferred over
the amount of the financial or economic benefit
received or reasonably expected to be received by the
donor or the related person. * * *
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