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§ 3.1 MEANING OF GIFTdistributed to its exempt parent would permit the exempt organization toreceive a greater return on its investment in its unrelated business (conductedindirectly by means of the subsidiary) than a nonexempt organization; and (3) itis from this competitive advantage that Congress intended to protect competingfor-profit businesses not linked to an exempt organization by taxing unrelatedbusiness income of exempt organizations and by limiting an exempt organization’scharitable contribution deduction from unrelated business income togrants made to other exempt organizations. 211 This appellate court concludedthat an ostensible contribution made by a for-profit subsidiary to its exempt parentis not a contribution considered to be made to another exempt organization,and therefore the benefits of the charitable deduction are not available to it forproperty transfers of this nature. 212Dividend treatment in this context can arise even when the charitable organizationreceiving a payment from a for-profit corporation is not a stockholder.In one case, a for-profit corporation, organized and operated for the purpose ofbenefiting a university, distributed funds to the university out of its earningsand profits. The university was not a stockholder of the corporation and did notexercise any control over it. Nonetheless, noting that the profits of the corporationwere distributed only to the university, a court held that the university wasa beneficial owner of the corporation and applied the dividend treatment rationaleaccordingly. 213(j) Requirement of CompletionExplicit and implicit in the foregoing discussion is the concept that, to constitutea gift, the transaction must be completed. Thus, to make a charitable gift, thedonor must part with all right, title, and interest in the donated property. 214Two situations nicely illustrate the point. A court held that a bargain sale 215of real estate to a charity, in a transaction that used a contract for deed, gave riseto a charitable deduction in the year the contract was entered into, because thecharity essentially received equitable title to the property. 216 In 1994, a marriedcouple signed a contract for sale of real property to a church. The purchase pricewas to be paid in installments, beginning January 1, 1995. Basically, a contract fordeed is an arrangement under which, once a down payment is made, the buyerbecomes entitled to immediate possession of the property. Legal title, however,remains in the seller until the purchase price is paid in full. In this case, the charityalso agreed to insure the property, keep it in good repair and condition, andpay property taxes. The charity was prohibited from assigning, selling, pledging,or mortgaging the property without the donors’ consent. Legal title wasconveyed to the charity at the end of 1997.211 As to the latter, see IRC § 512(b)(10).212 See also Dave Inv. Co. v. Commissioner, 462 F.2d 1373 (9th Cir. 1972).213 United States v. Knapp Brothers Shoe Manufacturing Corporation, 384 F.2d 692 (1st Cir. 1967), cert. denied,390 U.S. 989 (1968).214 The rules are somewhat different in this regard in such contexts as planned giving (see Part Four) and quid proquo situations (see § 22.2), but even there the statement is correct as to the deductible portion of the transaction.215 See § 9.19.216 Musgrave v. Commissioner, 80 T.C.M. (CCH) 341 (2000). 89