-432-
assert: “While a small discount for the fact that the note was
not to be paid until several months after the date of
contribution is perhaps required, there is no basis for
disallowing the entire contribution.” Petitioners submit that,
given the interest rates at the time (as reflected in the IRS’s
applicable Federal rates, as well as the 12-percent interest rate
set in the note itself), the 1982 deduction should be discounted
not more than $300.
Respondent contends the Kanters are not entitled to a
charitable contribution deduction for 1982 because: (1) There
was no endorsement of the THC promissory note by Kanter to JUF,
and (2) the Kanters failed to establish the note’s fair market
value as of the date of its purported contribution to JUF in late
1982.
B. The STJ Report
The STJ report recommended holding that the Kanters are
entitled to a charitable contribution deduction of $14,630 for
1982 related to the JUF transaction. We reject the
recommendation in the STJ report because it is erroneous as a
matter of law.
C. Analysis
Section 170(a) generally provides that a deduction is
allowed for a charitable contribution, payment of which is made
within the taxable year. Payment to a charity generally occurs
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