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parties, Gordon hired a real estate broker and listed the
property for sale. On December 31, 1992, Arbor and Wolverine
entered into a contract (the contract) with the University of
Michigan (U of M) to sell Wolverine Tower and their respective
interests in the land as lessee and sublessee, with a closing
date set for early 1993.2 The contract set the purchase price at
the "fair value" of the interests being sold as determined by an
appraisal to be obtained by Arbor and Wolverine. The appraisal
obtained by Arbor and Wolverine concluded the "fair value" of the
property was $9 million as of December 31, 1992, and U of M
purchased the property for that price on February 25, 1993.3
Although a "value in use" appraisal was not required by the
contract, Gordon requested that the appraiser determine the
"value in use" of Wolverine Tower specifically to U of M for the
purpose of determining the amount of a charitable contribution
deduction, if any. The appraisal concluded that the "value in
use" to U of M was $12.2 million.
To Arbor's 1993 Form 1065, U.S. Partnership Return of
Income, it attached a Form 8283, Noncash Charitable
Contributions, wherein it claimed a charitable contribution to U
2Contemporaneously with the sale of Wolverine Towers, on
Dec. 30, 1992, G.E. sold the land to the University of Michigan
(U of M) for $8 million.
3The $9 million figure was allocable solely to the purchase
of Wolverine Tower and not to the lease interests in the land.
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