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"substance of the transaction, considered in its entirety, is
that the partnership purchased only the unimproved land for $8
million." Mount Mercy Associates v. Commissioner, supra. The
Court found that the partnership attempted to structure a
transaction which had the appearance, but not the substance, of a
gift to charity. The Court stated that "The partnership's
purchase of an unwanted and unnecessary asset with no additional
cost to it should not result in a tax benefit where none was
actually intended by the statutes or, as a matter of substance,
the donee received nothing more than it already possessed."
Mount Mercy Associates v. Commissioner, supra. The Court went on
to observe that: "It was the partnership that produced the
subterfuge we must ignore." Mount Mercy Associates v.
Commissioner, supra. Consequently, we sustained respondent's
disallowance of the partnership's charitable contribution
deductions.
Petitioner was issued Schedules K-1 for the years in issue,
reflecting, among other items, his distributive shares of the
partnership's charitable deductions. Petitioner gave these to
his tax return preparer. Petitioner deducted $16,277 in 1985 and
$15,626 in 1986 as his share of Mount Mercy's charitable
deductions.
As a result of our decision in Mount Mercy Associates v.
Commissioner, supra, respondent disallowed petitioner's claimed
charitable contribution deductions. The corresponding
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