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made in good faith.” A taxpayer must satisfy two requirements to
obtain relief. Sec. 6659(f)(2). Section 6659(f)(2)(A) requires
that the taxpayer obtain a “qualified appraisal”, sec.
6659(f)(3)(C), by a “qualified appraiser”, sec. 6659(f)(3)(B).
In addition to obtaining an appraisal, the taxpayer must make a
good faith investigation into the value of the contributed
property. Sec. 6659(f)(2)(B); see also McMurray v. Commissioner,
985 F.2d 36, 43 (1st Cir. 1993), affg. in part on this ground,
revg. in part on other grounds, and remanding T.C. Memo. 1992-27.
Rose was a qualified appraiser within the meaning of section
1.170A-13(c)(5), Income Tax Regs.21 His appraisal was a
"qualified appraisal" that met the requirements of section
1.170A-13(c)(3), Income Tax Regs., and was relied on by
petitioner in good faith. Nothing in the record indicates that,
at the time of the appraisal, petitioner knew, or had any reason
to know, of the participation of Messrs. Rose and Rothschild in
the Jackie Fine Arts imbroglio, nor does the record indicate that
21 To be a “qualified appraiser” within the meaning of sec.
1.170A-13(c)(5)(i), Income Tax Regs., an appraiser must have:
(1) held himself or herself out as an appraiser or performed
appraisals on a regular basis; (2) been qualified on the basis of
background, experience, education, and membership, if any in a
professional association; (3) not been an excluded person under
sec. 1.170A-13(c)(5)(iv), Income Tax Regs.; and (4) understood
the consequences of rendering an intentionally false appraisal.
Based upon Rose’s testimonials, his membership in the
American Society of Appraisers, and the lack of any contrary
information reasonably available to petitioner, Rose met the
requirements of sec. 1.170A-13(c)(5)(i), Income Tax Regs.
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