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to obtain the boat and Mr. Hemmings decided to sell. Don then
informed Mr. Hemmings that the buyer wanted to trade 24 boxes of
gemstones (the gemstones) for the boat. Mr. Hemmings told Don
that if Don bought the boat and traded it for the gemstones, Mr.
Hemmings would buy the gemstones from him. This course of action
eventually was followed.
At Mr. Hemmings' request, Don provided an appraisal that
indicated a value of approximately $400,000 for the stones. Mr.
Hemmings subsequently purchased the gemstones with a $150,000
cashier's check from Citizens & Southern National Bank. Soon
thereafter, Mr. Hemmings, concerned that he might have been
swindled, obtained his own appraisal of the value of the
gemstones. That appraisal was consistent with the other
appraisal.
Mr. Hemmings attempted to sell the gemstones but found no
buyers. Mr. Hemmings did find dealers willing to sell the
gemstones on consignment, but he was uncomfortable with this
arrangement and instead donated the gemstones to the Gospel
Fellowship Association (Gospel Fellowship) in 1984.
On their 1984 Federal income tax return, the Hemmingses
claimed a deduction for a charitable contribution in the amount
of $320,756, reflecting the alleged value of the gemstones when
donated. In the notice of deficiency issued to the Hemmingses
for 1984, respondent determined that they were not entitled to
the claimed charitable contribution deduction because they did
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