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On February 28, 1983, Kanter paid $15,000 to the JUF by a
check on his personal bank account. Neither Holding Co. nor
Kanter paid any interest on the Holding Co. note to JUF.
Kanter did not establish that he endorsed the Holding Co.
note over to JUF in 1982. Kanter contends he is entitled to a
1982 charitable contribution deduction because the $15,000 note
was delivered to JUF during 1982.
OPINION
Section 170(a) generally provides that a deduction is
allowed for charitable contributions, payment of which is made
within the taxable year. Charitable contributions can be made in
the form of cash or property, including third party promissory
notes. See MacKay v. United States, 503 F.2d 591 (10th Cir.
1974), a case distinguishable from the facts herein.
The Kanters contend that they are entitled to a charitable
contribution deduction for 1982 of at least $14,700, which they
maintain was the Holding Co. promissory note's fair market value
on the date of its contribution to JUF in December 1982. They
assert that "While a small discount for the fact that the note
was not to be paid until several months after the date of
contribution is perhaps required, there is no basis for
disallowing the entire contribution”. The Kanters submit that,
given the interest rates at the time (as reflected in the IRS's
applicable Federal rates, as well as the 12-percent interest rate
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