- 49 -
Since petitioners received consideration for their
intangibles, their charitable contribution deductions fail unless
they can show, pursuant to the theory approved in United States v.
Am. Bar Endowment, 477 U.S. 105 (1986), that the transfer of their
intangibles to SMF had a "dual character" as both a transfer for
consideration30 and a contribution. To do so, however, petitioners
"must at a minimum demonstrate that * * * [they] purposely
contributed money or property in excess of the value of any
benefit * * * [they] received in return." Id. at 118; see also
Sklar v. Commissioner, 282 F.3d at 620-622.
Petitioners have not shown that the value of what they
transferred to SMF exceeded the value of the benefits they
received in return. As noted above, those benefits included, in
29(...continued)
excess of fair market value over the (purported) purchase price.
In our view, this provision is a self-serving attempt to support
the claim for a charitable deduction contribution. As discussed
hereinafter, the SWMG physicians received many other kinds of
consideration in connection with the integrated transaction. The
effort in the APAs to allocate any consideration away from the
intangible assets was self-serving for the SWMG physicians and a
matter of indifference for SMF. Notably, notwithstanding the
APAs' characterization of a contribution of intangible assets,
SMF did not report the receipt of any such contributions on its
Form 990 for 1994.
30 United States v. Am. Bar Endowment, 477 U.S. 105 (1986),
and the revenue ruling therein approved by the Supreme Court
(Rev. Rul. 67-246, 1967-2 C.B. 104) both involved transfers of
cash for goods or services that purportedly had dual characters
as purchases and contributions. The same principle applies,
however, to a transfer of property for consideration, see, e.g.,
Transamerica Corp. v. United States, 902 F.2d 1540, 1543-1546
(Fed. Cir. 1990), such as the transfer of the assets of
petitioners' medical practices at issue.
Page: Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 Next
Last modified: March 27, 2008