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petitioner's charitable contribution deduction is limited by her
adjusted basis in the MLR easement.
The computation of petitioner's basis in the MLR easement is
equal to that portion of the adjusted basis of the entire
property that bears the same ratio to the adjusted basis of the
entire property as the fair market value of the donated property
bears to the fair market value of the entire property. See sec.
170(e)(2); sec. 1.170A-4(c)(1)(i), Income Tax Regs. Therefore,
under section 170(e) and the regulations thereunder, petitioner's
allowable charitable contribution deduction for 1993 is $800,000
(i.e., $2.5 million (petitioner's 1993 adjusted basis in her
property) x 32 percent)). See Griffin v. Commissioner, T.C.
Memo. 1989-130, affd. 911 F.2d 1124 (5th Cir. 1990).
Issue 2. Whether $290,000 Was the Fair Market Value of the 1994
Amendment to the MLR Easement.
In November 1994, an amendment to the MLR easement was
recorded. The amendment further restricted the property by
allowing only one additional residence rather than two as
contemplated in the MLR easement. Wheeler assigned a value of
$290,000 to the amendment. Hoeger concluded the amendment had a
value of zero.
Wheeler based his conclusion on an analysis of the value of
several comparable properties. Hoeger's analysis of the 1994
amendment included one paragraph in his report that stated the
following:
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