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to the attorney’s benefit. Moreover, this argument by
petitioners undermines their assertions as to the value of the
collection of copies and the amount of their charitable
contribution deduction. The appraisal of copied documents from
an attorney’s case file as if it contained originals or the only
set of documents, even if discounted by 50 percent because all
the documents were photocopies, and without regard to the
existence of multiple sets of the copies, is a major defect in
the Payne appraisal.
Finally, even if the materials were the work product of
petitioner such that he was potentially the legal owner of them,
petitioners would not be entitled to a charitable contribution
deduction for the donation of them. The amount of any charitable
contribution of property otherwise taken into account for the
deduction under section 170(a) must be reduced by the amount of
gain that would not have been long-term capital gain (i.e., by
the amount of gain that would have been ordinary gain) if the
property contributed had been sold by the taxpayer at its fair
market value. Sec. 170(e)(1)(A). Thus, unless the materials
were long-term capital assets, petitioners’ deduction, if
otherwise allowable, would be limited to their cost or basis in
the materials. See id. Section 1221(a)(3) specifically excludes
from the definition of “capital asset”:
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Last modified: March 27, 2008