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gift as a payment “made with no expectation of a financial return
commensurate with the amount of the gift”)); see also United
States v. Am. Bar Endowment, 477 U.S. 105, 116, 118 (1985) (“The
sine qua non of a charitable contribution is a transfer of money
or property without adequate consideration.”).
NHF used petitioners’ $36,000 payments to pay the premiums
on the life insurance policy, $434,509 (or 44 percent of the
death benefits) of which petitioners’ family trust was entitled
to receive as beneficiary.
Petitioners point out that NHF was not required, and did not
promise, to use their contributions to pay the premiums on the
insurance policy on the life of Mrs. Addis. However, NHF
provided consideration for petitioners’ payments because, at the
time petitioners made payments to NHF, they expected to receive
44 percent of the death benefit under the policy. Petitioners
expected NHF to use their $36,000 contributions to pay NHF’s
portion of the premiums on the life insurance policy in 1997 and
1998. Sec. 1.170A-13(f)(6), Income Tax Regs. Petitioners’
expectation that NHF would pay the premiums on the life insurance
policy was reasonable because it was in NHF’s financial interest
to pay premiums on petitioners’ life insurance policy in return
for a guaranteed death benefit of $557,280.
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Last modified: May 25, 2011