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quotations are published on a daily basis in a
newspaper of general circulation throughout the United
States.
(If the market value of an issue of a security is
reflected only on an interdealer quotation system, the
issue shall not be considered to be publicly traded
unless the special rule described in paragraph
(c)(7)(xi)(B) of this section is satisfied.)
III. Discussion
A. Introduction
Petitioners are not entitled to the disallowed deductions if
the shares were not, on the transfer date, “qualified appreciated
stock” (qualified appreciated stock), within the meaning of
section 170(e)(5)(B). If the shares were not qualified
appreciated stock, then, because there is no dispute that the
shares were contributed to a private foundation (other than a
private foundation described in section 170(b)(1)(E)),
petitioners’ deduction on account of the transfer cannot exceed
$33,338.1 Alternatively, petitioners are not entitled to the
disallowed deductions if they are subject to, and failed to
satisfy, the substantiation requirements set forth in section
1.170A-13(c)(2)(i), Income Tax Regs. (the substantiation
requirements).2
1 There is no dispute that the shares were capital assets
in petitioner’s hands and that his adjusted basis in the shares
was $33,338.
2 Pursuant to sec. 1.170A-13(c)(1)(i), Income Tax Regs., if
the substantiation requirements are not satisfied (and a
(continued...)
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