Failure to Disclose Adjusted Basis on Disclosure Form Costs Taxpayer $33M+ Charitable Deduction

Under Treas. Regs. §1.170A-13, taxpayers making substantial noncash charitable contributions are required to disclose information regarding the contribution on Form 8283.

In March 2002, a partnership paid $2.95 million to acquire a remainder interest in property. A year and a half later, it assigned the interest to a university and claimed a charitable deduction of $33,019,000. The Form 8283 that the taxpayer submitted with its income tax return to disclose the contribution required the donor to provide the “Donor’s cost or other adjusted basis,” but the partnership left that disclosure blank.

The IRS sought to disallow the deduction for the taxpayer’s failing to meet the reporting requirements. The taxpayer responded with a substantial compliance argument.

On review, the Tax Court held a taxpayer can raise substantial compliance. . .

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