- 40 -
complete conveyance. TMC retains no interest in the
improvements. Conveyance of the improvements subject
to a land lease has been recognized as a deductible
charitable contribution. Arbor Towers Associates, Ltd.
v. Commissioner, 1999 T.C.Memo 213. The substance of
this gift is substantially more than the right to use
the improvements rent-free. [Reproduced literally.]
Petitioners’ argument fails to address the requirements of
Ohio law (discussed below) that must have been satisfied in order
to establish one of the essential elements of a bona fide inter
vivos gift with respect to KQC’s claimed noncash charitable
contribution to TMC, viz, that KQC made an irrevocable transfer
to TMC of legal title to the improved property on Maple Street or
to any portion of such property. On the record before us, we
reject petitioners’ argument that on December 31, 1999, KQC made
such an irrevocable transfer.
With respect to the bill of sale on which petitioners rely,
that bill of sale purports to convey to TMC all of KQC’s rights,
title, and interest in and to only the “improvements” on KQC’s
land, and not to KQC’s land itself. With respect to the “im-
provements” to which the bill of sale referred, the parties
dispute whether such “improvements” consisted of the 1958 school
building, as respondent maintains, or both the 1958 school
building and the new building that TMC constructed on KQC’s land
with HHS’s grant funds, as petitioners maintain. We need not
resolve that dispute.15 That is because, assuming arguendo that
15We note, however, that, when Mr. Matamoros prepared the
(continued...)
Page: Previous 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 NextLast modified: May 25, 2011