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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
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