- 4 -
are a consequence of the denial of this charitable deduction and
the carryover into 1995.
On December 30, 1997, Kenneth L. Musgrave, conveyed legal
title to the property, by warranty deed with vendor's lien to the
Church. The conveyance was duly recorded in the office of the
county clerk of Taylor County, Texas. The Church delivered a
real estate lien note to Kenneth L. Musgrave in the principal sum
of $133,315.69 and a deed of trust dated December 30, 1997,
securing such note with the property.
Discussion
Section 170(a) allows a deduction for any charitable
contribution made during the taxable year. Section 170(c)
defines the term “charitable contribution” to include a
contribution or gift to or for the use of a corporation, trust,
or community chest, fund, or foundation organized and operated
exclusively for religious purposes. A taxpayer who sells
property for less than the property’s fair market value (i.e.
makes a bargain sale) to a charity is typically entitled to a
charitable contribution deduction equal to the difference between
the fair market value of the property and the amount realized
from the sale. See Stark v. Commissioner, 86 T.C. 243, 255-256
(1986); Knott v. Commissioner, 67 T.C. 681 (1977);
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011