Charles H. Browning, Jr., and Patricia L. Browning - Page 18

                                       - 18 -                                         

          1.170A-4(c)(2)(ii), Income Tax Regs.  “In order for a conveyance            
          to constitute a charitable contribution as a bargain sale the               
          seller must make the conveyance with the requisite charitable               
          intent and the fair market value of the property on the date of             
          the sale must in fact exceed the sales price.”  Grinslade v.                
          Commissioner, 59 T.C. 566, 577 (1973); accord Waller v.                     
          Commissioner, 39 T.C. 665, 677 (1963); see also Stark v.                    
          Commissioner, 86 T.C. 243, 255-256 (1986) (taxpayer who makes a             
          bargain sale to charity is entitled to claim a charitable                   
          contribution equal to the difference between the fair market                
          value of the property and the amount realized from the sale).  It           
          is clear from respondent’s briefs that respondent is not                    
          challenging petitioners’ charitable intent (“respondent would               
          concede that petitioners’ evidence as to the subjective beliefs             
          of the parties is persuasive on the issue of donative intent”),             
          but is arguing that the fair market value of the easement did not           
          exceed the amount realized from its sale:  “[P]etitioners bear              
          the burden of showing that what they received in exchange for the           
          deed of easement was not commensurate with the value of the                 
          property exchanged.”  Therefore, we shall first determine the               
          fair market value of the easement on the conveyance date.                   
               B.  Section 1.170A-14(h)(3)(i), Income Tax Regs.                       
               The general rule is that the amount of a charitable                    
          contribution made in property is the fair market value of the               

Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  Next

Last modified: May 25, 2011