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Abstract: 

The charitable contribution of real property can be an effective tax planning tool for the donor and a boon to the recipient, creating a true win-win scenario for both parties. When the donor fails to appropriately identify and valuate any potential received benefit stemming from the donation, however, the value of the contributed property—and its attendant tax deduction—can disappear. Prior to making a contribution of real property, then, the parties to the transaction need to carefully evaluate the circumstances surrounding the gift to ensure that any non-monetary benefit received in exchange (even if unintended) is properly identified, valued, and incorporated in to the donor’s claimed charitable contribution deduction. A recent Tax Court case underscore this point.

Keywords: Triumph Mixed Use Investments III, LLC et al. v. Commissioner; “SubstantialBenefit;” Pleading in the Alternative

Affiliations:  1: Clark Hill Strasburger.