Estate of Bullard v. Commissioner
United States Tax Court
Ps sold certain "capital gain property" to a charitable institution for less than fair market value and elected to apply the "appreciation reduction" rules of sec. 170(e)(1), I.R.C. 1954 as amended, to the bargain sale. Held: The amount of Ps' charitable contribution is reduced by 50 percent of the unrealized appreciation of only the "contributed" portion of the property. Sec. 1011(b), I.R.C. 1954, as amended, applies to the "sold" portion of the property.
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Ps sold certain "capital gain property" to a charitable institution for less than fair market value and elected to apply the "appreciation reduction" rules of sec. 170(e)(1), I.R.C. 1954 as amended, to the bargain sale. Held: The amount of Ps' charitable contribution is reduced by 50 percent of the unrealized appreciation of only the "contributed" portion of the property. Sec. 1011(b), I.R.C. 1954, as amended, applies to the "sold" portion of the property. Held, further, to the extent that secs. 1.170A-4(c) and 1.1011-2, Income Tax Regs., provide otherwise, the regulations are invalid.
1Opinion of the Court
OPINION
COHEN, Judge:
Respondent determined deficiencies in Victor M. and Pauline E. Bullard’s Federal income taxes for 1978 and 1979 of $2,397 and $8,647, respectively. The only issue for decision is the availability of a charitable contribution deduction under section 1701 with respect to the “bargain sale” of certain appreciated capital gain property.
The parties submitted this case fully stipulated pursuant to Rule 122, Tax Court Rules of Practice and Procedure.
Victor M. and Pauline E. Bullard filed joint Federal income tax returns for 1977, 1978, and 1979 with the Internal Revenue Service…
2Cases cited20 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
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- United States v. CartwrightSupreme Court of the United States · 1973
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