Terry O'Neal Styron - Page 5




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          his investment in the boat.  He consulted with a firm of                    
          certified public accountants (C.P.A.'s), and the C.P.A. firm                
          advised petitioner that, based on an $80,000 valuation for the              
          boat, petitioner should receive at least $25,000 in a bargain               
          sale to IMS, which, combined with the income tax savings from the           
          charitable contribution deduction, would realize for petitioner             
          an amount in cash and tax savings that would come reasonably                
          close to petitioner's investment.  IMS, accordingly, agreed to              
          purchase the boat from petitioner for $25,000.  IMS engaged the             
          services of a boat appraiser (whose $300 fee was paid by                    
          petitioner), and the appraiser prepared a written appraisal                 
          report, dated December 21, 1994, in which he valued the boat at             
          $80,000.  Petitioner sold the boat to IMS on December 30, 1994,             
          for $25,000.  Shortly thereafter, on January 27, 1995, IMS sold             
          the boat to Waters Edge Marine of Dania, Florida, for $35,000.              
               Petitioner divided the transaction into two parts on his               
          1994 Federal income tax return.  He reported the bargain sale               
          aspect of the transaction as the sale of an asset on Schedule D,            
          Capital Gains and Losses.  He reported the selling price received           
          of $25,000, a basis of $16,563, resulting in a long-term capital            
          gain of $8,437.3  Then, on Schedule A, Itemized Deductions,                 


               3    Since the $25,000 selling price represented 31.25                 
          percent of the $80,000 value for the boat, that percentage figure           
          applied to a cost price of $53,000 results in the rounded amount            
                                                             (continued...)           





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