Interco Inc.

226 Ct. Cl. 524, 1980 U.S. Ct. Cl. LEXIS 400, 1980 WL 4739

• Court: United States Court of Claims
• Decided: December 12, 1980
• Docket: No. 300-76
• Status: Published

Opinion

Taxes; income tax; charitable contribution deduction; fair market value. — On December 30, 1971 plaintiff donated City Block 526, St. Louis, Missouri (a warehouse with adjacent parking lot) to the Washington University of St. Louis, a charitable and educational institution as described in Section 170(c)(2) of the Internal Revenue Code. On its 1971 federal income tax returns, plaintiff valued the donation to Washington University at $1,690,000 and claimed a charitable contribution deduction in the amount permitted by the limitations under Section 170(b)(2) of the Code. The Internal Revenue Service then determined the value of the gift to be $518,000 and issued a statutory notice of deficiency for the additional tax resulting from the corresponding increase in plaintiffs taxable income for 1971. Plaintiff paid the deficiency assessed, filed a claim for refund with the Internal Revenue Service, and upon its denial, timely filed a suit for a refund of the deficiency amount it paid. On April 9, 1980 Trial Judge James F. Merow filed a recommended opinion (reported in full at 80-1 USTC ¶ 9346 and 45 AFTR 2d 80-1375) concluding, under the capitalization of income approach, that the fair market value of plaintiffs City Block 526 property on December 30, 1971 was $1,134,052. Plaintiff is therefore entitled to a refund of taxes paid, together with interest as provided by law. On December 12,1980 the court, by order, adopted the recommended decision of the trial judge as the basis for its judgment in this case and entered judgment for plaintiff with the amount thereof to be determined in further proceedings pursuant to Rule 131(c). On July 2, 1981 the court entered judgment for plaintiff for $251,693.62 plus statutory interest.