John C. and Tate M. Todd - Page 22

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          to them on account of the transfer of the shares to the                     
          foundation.  See sec. 1.170A-13(c)(1)(i), Income Tax Regs.                  
                    5.  Qualified Appreciated Stock                                   
               Since the shares were not qualified appreciated stock,                 
          petitioners’ deduction on account of the transfer is, for a                 
          second reason, limited to $33,338.                                          
          IV. Conclusion                                                              
               Respondent has prevailed on the only issue for decision.               
          Petitioners are not entitled to the disallowed deductions.                  

                                                  Decision will be entered            
                                             for respondent.                          

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