Full Text:

January 28, 1980

Refer Reply to: T:I:I:3:2
***
X = ***

Dear ***

This is in reply to a request for a ruling submitted on your behalf by your authorized representative regarding the federal income tax consequences of the transaction described below.

Three years ago you acquired a piece of real property. When you acquired the property, a rare oriental tree was located on the property. You now plan to donate the tree to the botany department of X. There will be no conditions attached to the gift. Your representative requests a ruling that you may deduct as a charitable contributions the fair market value of the three at the time of the contribution.

X is an organization described in sections 501(c)(3) and 170(c)(2) of the Internal Revenue Code.

Section 170(a) of the Code provides, subject to certain limitations, for the allowance of a deduction for charitable contributions to or for the use of organizations described in section 170(c), payment of which is made within the taxable year.

Section 170(e)(1) of the Code provides, in part, that the amount of any charitable contribution of property otherwise taken into account shall be reduced by the sum of the amount of gain that would not have been long-term capital gain if the property contributed had been sold by the taxpayer at its fair market value.

Section 1.170A -- 1(e)(1) of the Income Tax Regulations provides that if a charitable contribution is made in property other than money, the amount of the contribution is the fair market value of the property at the time of the contribution reduced as provided in sections 170(e)(1) of the Code and in 1.170 -- 4(a) of the regulations.

The provisions of section 170(e)(1) of the Code are not applicable to the situation presented. Accordingly, the amount of the contribution is the fair market value of the tree. You may deduct this contribution, subject to the percentage limitations of section 170(b)(1) of the Code.

It is your responsibility to establish the fair market value of the tree to the satisfaction of the district director having audit jurisdiction over your return.

Except as specifically ruled upon above, no opinion is expressed as to the federal income tax consequences of the transaction described above under any other provision of the Internal Revenue Code.

You should attach a copy of this ruling to your tax return for the taxable year in which you claim the deduction. We are enclosing a copy for that purpose.

In accordance with the power of attorney on file with this office, a copy of this letter is being sent to your authorized representative.

Sincerely yours,

Anthony Manzanares, Jr.
Chief, Individual Income Tax Branch