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OTHER ASPECTS OF DEDUCTIBLE GIVINGThe gift may entail a reduction of the otherwise deductible amount 1 or mayimplicate one or more of the percentage limitations. 2 The income tax rules and/orthe gift and estate tax rules 3 may be involved. The property may be personalproperty or real property, tangible property or intangible property.Whatever the circumstances, the determination of a federal income tax charitablecontribution deduction for a gift of property to charity is likely to requirevaluation of the property. There are appraisal requirements for larger charitablecontributions; 4 the value of gift property is an integral part of the substantiationrequirements 5 and the quid pro quo contribution rules. 6(a) General PrinciplesToo frequently, the valuation of property is not confined to good faith estimatesby charitable organizations or the work of appraisers. There can be controversyin this area between contributors and the IRS, with the matter forced into courtfor resolution.In litigation, the court may be called upon to decide the value of an item ofgift property. This issue is one of fact, not law. 7 In this type of litigation, it is commonfor one or both sides to use one or more expert witnesses in an attempt toconvince the court of the merits of a particular value. The court may rely on theexpertise of one or more of these witnesses or may disregard all of them and seta value on the basis of its own belief as to value. 8 As with any witness, the credibilityof the expert witness (and of the donor) in the eyes of a court is critical informulating the outcome. 9 A finding by a trial court of a value for an item ofproperty will be set aside on appeal only if the finding of the value is clearlyerroneous. 10The pertinent value in this context is the fair market value of the property. As ageneral rule, the fair market value of an item of property is the price at which theproperty would change hands between a willing buyer and a willing seller, neitherbeing under any compulsion to buy or sell and both having reasonable knowledgeof relevant facts. 11 The valuation standard for charitable contribution deductionpurposes generally is the same as that used for estate and gift tax purposes. 121 See Chapter 4.2 See Chapter 7.3 See Chapter 8.4 See § 21.2.5 See § 21.1(b).6 See § 22.2.7 See, e.g., Goldstein v. Commissioner, 89 T.C. 535 (1987); Skripak v. Commissioner, 84 T.C. 285 (1985); Zmudav. Commissioner, 79 T.C. 714 (1982), aff’d, 731 F.2d 1417 (9th Cir. 1984).8 See, e.g., Helvering v. National Grocery Co., 304 U.S. 282 (1938); Newhouse Estate v. Commissioner, 94 T.C.193 (1990); Parker v. Commissioner, 86 T.C. 547 (1986); Johnson v. Commissioner, 85 T.C. 469 (1985); BuffaloTool & Die Mfg. Co. v. Commissioner, 74 T.C. 441 (1980).9 In one case, the court ruled that the donors of mining claims were not entitled to any charitable deduction becausethe claims lacked any value. In rejecting the testimony of the donors’ expert witness, the court noted thathis values were “financial fantasies.” Snyder v. Commissioner, 86 T.C. 567, 585 (1986).10 Anselmo v. Commissioner, 757 F.2d 1208 (11th Cir. 1985).11 Reg. § 1.170A-1(c)(2).12 See, e.g., United States v. Parker, 376 F.2d 402 (5th Cir. 1967); Lio v. Commissioner, 85 T.C. 56 (1985), aff’dsub nom. Orth v. Commissioner, 813 F.2d 837 (7th Cir. 1987); Anselmo v. Commissioner, 757 F.2d 1208 (11thCir. 1985). 356