- 8 -
record, we conclude that Arbor acquired Wolverine Tower under the
leaseback contract and owned it until it was sold to U of M.7
We now turn to whether the sale was a bargain sale resulting
in a charitable contribution. This will turn on whether Arbor
sold Wolverine Tower to U of M for less than its fair market
value. We hold it did not. A sale of property to a section
170(c) organization accompanied by a donative intent on the part
of the vendor gives rise to a deductible charitable contribution
if the sale price is less than the fair market value of the
property sold. See United States v. American Bar Endowment, 477
U.S. 105 (1986); Stark v. Commissioner, 86 T.C. 243 (1986);
Waller v. Commissioner, 39 T.C. 665 (1963).8 The regulations
under section 170 provide: "If a charitable contribution is made
in property other than money, the amount of the contribution is
the fair market value of the property at the time of the
contribution". Sec. 1.170A-1(c)(1), Income Tax Regs. The
regulations define "fair market value" as "the price at which the
property would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and
7To embrace respondent's theory we would have to find U of M
paid the $9 million solely to buy out the interests of Arbor and
Wolverine in the land lease. This makes no sense and is not
supported by the record.
8Respondent does not raise the issue of whether donative
intent was lacking on these facts.
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