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The Bates Center building was primarily a gymnasium with a
full length basketball court, but it also contained some small
classrooms, a storage area, a parlor, a small kitchen, locker
rooms, rest rooms, and a small fireplace. The Bates Center could
be used as a church.
On June 7, 1991, Mr. Sessions acquired the Bates Center and
the adjoining church (located directly to the east of the Bates
Center) in a trade with the First Church of the Nazarene. The
traded properties were each valued at $600,000. Mr. Sessions
owned the entire fee simple interest in the Bates Center.
On September 23, 1992, Mr. Sessions gave the Bates Center to
the Northwest Texas Church of God in Christ. The Northwest Texas
Church of God in Christ purchased the church that adjoins the
Bates Center for $550,000.6 The Northwest Texas Church of God in
Christ is a qualified charitable organization under section 170.
Based on an appraisal that determined the fair market value
of the Bates Center to be $350,000 on December 23, 1992, Mr. and
Mrs. Sessions deducted $350,000 as a charitable contribution on
their 1992 Federal income tax return for the gift of the Bates
Center.
Respondent determined that the market value of the Bates
Center on September 23, 1992, was $178,000.
6 Although it is unclear from the record, it appears that
the gift of the Bates Center and the purchase of the adjoining
church occurred relatively close in time to one another.
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Last modified: May 25, 2011