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SPECIAL GIFT SITUATIONSThe other school of thought is that an item auctioned at a charity auction hasa fair market value irrespective of the amount paid for it at the auction. Thisapproach would allow a charitable deduction for an amount paid at a charityauction that is in excess of the value of the property.In actual practice, most items disposed of at a charity auction are acquiredfor a value that does not involve any gift element (because the amount paid isroughly equal to the value of the item, or perhaps less), and thus there is nocharitable deduction. If a person wants to claim a charitable deduction, the burdenof proof is on the putative donor to prove that what was paid was in excessof the fair value of the property. This burden of proof can probably be met whenit is relatively easy to prove the fair market value of the item, such as an applianceor automobile. But when the value of an item is difficult to discern, it islikely to be a struggle for an auction patron to convince the IRS that a portion ofthe amount paid was a deductible gift.The determination of the fair market value of an item is the work of appraisers.Essentially, they look at comparables. If a house sold for $200,000, all otherfactors being equal, that is the value at the time of sale of the neighboringhouses. Thus, the critical factor is the determination of the market. This involvesgeographical, economical, and timing elements.Some disparage the idea that the value of an item sold at a charity auction isset at the time of purchase. 348 There cannot be any dispute that the auction is amarket, but these critics say it should not be presumed that the price paid for anitem at a charity auction is its fair market value. This is particularly the casewhen the value is ascertainable commercially: if the amount paid at an auctionfor an item of property is in excess of that value, it is easier to make the case thatthe difference in amounts was a contribution. For example, if a charitable organizationauctioned an automobile with a sticker price of $20,000, and received$25,000 for the vehicle, it is reasonable to assume that the individual whoacquired the vehicle is entitled to a charitable deduction of $5,000.Regulations contain an example concerning an individual who attends anauction held by a charitable organization. 349 Prior to the auction, the organizationpublishes a catalog that meets the requirements for a written disclosurestatement under the quid pro quo rules, 350 including the charity’s good faith estimateof the value of the items that will be available for bidding. A copy of thecatalog is given to everyone in attendance at the auction. This individual readsin the catalog that the charitable organization’s estimate of the value of a vase is$100. The individual has no reason to doubt the accuracy of this estimate. Theindividual successfully bids and pays $500 for the vase. Because this individualknew, prior to making the payment, that the estimate in the catalog was less thanthe amount of the payment, the individual satisfies the required element ofintent. 351 Thus, this individual may treat the charity’s estimate of the value of thevase as its fair market value in determining the amount of the charitable deduction(which, in general, would be $400).348 Id. at 142–43.349 Reg. § 1.170A-1(h)(5), Example 2.350 See § 9.13(e).351 See § 22.2, text accompanied by notes 43–44. 314