-9-
that an appraisal of the subject property be obtained. TRRC
retained Keith White (Mr. White) of White Realty & Appraisal to
perform an appraisal of the property that was attached to TRC’s
information tax return, Form 1065, U.S. Partnership Return, for
1998.
Deductions at Issue
TRY claimed a charitable contribution of $475,000 with
respect to the subject property, although TRY purchased the
subject property for $75,000 just 17 months before the date of
donation. TRY included each petitioner husband and wife’s
respective portion of this charitable contribution on their
respective Schedules K-1, Partner’s Share of Income, Deductions,
Credits, etc., for 1998.
Petitioners in each docket filed joint tax returns for 1998
and claimed their proportionate share of TRC’s $475,000
charitable contribution deduction for 1998, up to the statutory
limit of 30 percent of adjusted gross income. Sec. 170(b)(1)(F),
170(b)(1)(B)(I). Petitioners carried forward the remaining
portion of the charitable contribution and deducted portions on
their joint tax returns for 1999 and 2000, the years at issue in
this case.
Respondent issued deficiency notices to petitioners for 1999
and 2000 on September 16, 2003, in which respondent determined
the subject property had a value of $76,200, rather than the
$475,000 claimed by petitioners. Respondent accordingly
partially disallowed petitioners’ deductions for the charitable
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