- 8 -
similar items of property donated to 1 or
more donees) exceeds $5,000.
In the case of any property which is nonpublicly
traded stock, subparagraph (B) shall be applied by
substituting "$10,000" for $5,000".
The Secretary of the Treasury has implemented the foregoing
provisions by issuing section 1.170A-13, Income Tax Regs., which,
among other matters, provides that a "qualified appraisal" be
obtained prior to the filing of the return in which the deduction
is claimed and that an appraisal summary be submitted with that
return.
Respondent disallowed the amounts of petitioners' charitable
deductions for the Jackson Hewitt stock in excess of basis due to
the lack of qualified appraisals.7 Respondent does not dispute
that petitioners made charitable contributions to the church and
foundation within the respective taxable years or that the
claimed values did not represent the fair market values of such
contributions.8 Petitioners maintain that they should be allowed
the claimed deductions because their use of the average per-share
price of Jackson Hewitt stock traded in bona fide, arm's-length
transactions constituted substantial compliance with the
7 Respondent has not sought to disallow the contributions
in their entirety. Cf. D'Arcangelo v. Commissioner, T.C. Memo.
1994-572; see also supra note 6.
8 Respondent has conceded the sec. 6662(a) penalty insofar
as it relates to the contributions to the church and the
foundation.
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