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There were a total of five beds in the habitat. The vessel was
rechristened “Jules Undersea Lodge” (JUL).
By the end of 1986, JUL was submerged in a lagoon located in
Key Largo, Florida. JUL had its first overnight guest by 1986.
By 1989, the vessel and its related equipment were transferred to
Sealodge.
The cost to build a vessel in accordance with the standards
of the American Board of Shipping (ABS) and to have the vessel
certified by the ABS would be from 25 to 50 percent more than the
cost to build the same vessel without ABS certification.
JUL has never been certified by ABS.
JUL has been subject to a regular maintenance program, but
there have been no major renovations to it since 1986.
During the years prior to and following the contribution in
dispute, approximately 90 percent of JUL’s usage was as an
undersea hotel. The remaining use has been as a research
facility. The operation of JUL as an undersea hotel had net
operating losses for the 4 years prior to the charitable
contribution ranging from $5,434 to $21,067.
OPINION
In this valuation dispute, the parties adopt very similar
methodologies but use widely different estimates of the elements
of the methodologies they apply. Petitioners’ position presents
an internal inconsistency between the estimate of replacement
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Last modified: May 25, 2011