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§ 15.3 UNDIVIDED PORTIONS OF ENTIRE INTERESTS IN PROPERTYrent payable under the lease would be proportionately reduced. The IRSruled that there was a charitable contribution deduction for the fair marketvalue of the undivided two-fifths interest in the property contributed to theorganization and that contributions of all or a part of the retained threefifthsinterest in the property to the charitable organization would also giverise to a charitable deduction. 55• An individual owned approximately 30 acres of improved real property.This individual planned to retain all rights to approximately two acres ofthe property. The individual planned to make a series of contributions toa charitable organization of undivided interests as tenant in common inthe balance of the acreage. Under each deed conveying an undividedinterest, the charitable organization would have the right to possession,dominion, and control of the approximately 28 acres for a portion of eachyear appropriate to the interest conveyed. To enable the charitable organizationto use the entire 30 acres for the entirety of the first year in whichthe individual conveyed the 28 acres, the individual planned to grant tothe charitable organization a one-year lease of the retained undividedinterest in the 28 acres and the two acres not subject to any undividedinterest in the charity. The lease required the charity to pay all expensesfor upkeep, maintenance, and repair, and any taxes and assessments leviedupon the 30 acres. The charitable organization was also required tobear the expense of any improvements it made on the 30 acres, withoutregard as to whether the improvements were made to the two acres or the28 acres. The IRS ruled that the fair market value of the undivided interestsconveyed to the charitable organization would be deductible as charitablecontributions in the years made (and that the amounts equal to anyexpenses paid or incurred, or any improvements made, by the charitableorganization with respect to the 30 acres during the one-year lease termwould be items of gross income to this individual). 56• An individual had an extensive collection of paintings and sculptures thatwere kept in the individual’s home. A museum (a public charity 57 )wanted to acquire the entire collection at one time but could not becauseof a lack of exhibit space and money, so the parties agreed that themuseum would acquire the collection by means of a series of bargainsales. 58 Under the terms of the agreement, the museum paid a total of $8xfor the collection, an amount that was substantially less than the fair marketvalue of the collection. The initial payment was $2x. The remaining$6x was payable in equal installments of $1x over the six successive yearsfollowing the year in which the initial payment was made. After making apayment, the museum acquired an undivided ownership interest in each55 Rev. Rul. 58-261, 1958-1 C.B. 143.56 Priv. Ltr. Rul. 8204220.57 See § 3.4(a). This distinction is noted because, if the museum were a private foundation, the ensuing charitabledeductions would have to be confined to allocable portions of the donor’s basis in the property. See § 4.5. Also,no reduction in the deduction was required because the donated property was used by the charitable donee forpurposes related to its tax exemption. See § 4.6.58 Bargain sales are the subject of § 9.19. 511