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the taxpayers did not obtain qualified appraisals before filing
their returns for the years at issue. The values or deductions
claimed were not based upon appraisals; instead they were based
upon average per-share prices of the stock traded in arm’s-length
transactions at approximately the same time as the gifts. Even
though the values were undisputed, the Court found that the
taxpayers had not complied with section 170 and section 1.170A-
13, Income Tax Regs., and that they were not entitled to
deduct any amount in excess of the amount allowed by the
Government, which was their basis.
In Hewitt the Government disallowed the value of the stock
in excess of basis because of the lack of qualified appraisals.
The Government agreed that the taxpayers made charitable
contributions, that the donee was charitable, and that the
claimed values represented fair market values of the
contributions. The taxpayers in Hewitt maintained that they
should be allowed the deductions because the value used was the
average price per share as traded in bona fide, arm's-length
transactions. Relying on the holding in Bond v. Commissioner,
supra, the taxpayers in Hewitt contended that they had
substantially complied with the requirements of section 1.170A-
13, Income Tax Regs., and that they were relieved of any
obligation to obtain a qualified appraisal. Hewitt v.
Commissioner, supra at 262.
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