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For 1992, petitioners claimed $42,738 as a charitable deduction
for the newspapers and carried the excess contribution forward to
1993. For 1993, petitioners claimed a charitable contribution
carryover of $402,699, but limited the amount of their charitable
deduction to $126,605, and carried the excess contribution
forward to 1994. For 1994, petitioners claimed a charitable
contribution carryover of $276,094, but limited the amount of
their charitable deduction to $50,513, and carried the excess
contribution forward to 1995.
On March 24, 1998, respondent issued a notice of deficiency
for the years 1993 and 1994. In the notice of deficiency,
respondent determined that the fair market value of petitioners’
50-percent share of the Los Angeles and Chicago newspapers
donated to the SFACA was not greater than $5,000. Because
petitioners claimed charitable contribution deductions exceeding
$5,000 in prior years, respondent eliminated the carryovers to
1993 and 1994. Petitioners timely filed a petition to this Court
seeking a redetermination. In May of 2000, Mr. Verb issued
petitioner an updated appraisal of the newspapers, this time
including the value of the magazine, Sunday comic, and daily
comic strip sections. In his appraisal, Mr. Verb determined that
the magazine, Sunday comic, and daily comic sections were worth
$426,947.50.
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