Therefore, the value of Quinn’s contribution of the books is $10,000, the amount at which similar lots of books could be purchased from the promoter by members of the general public. The promoter was a willing seller for $10,000. The difference between the two prices was solely at the discretion of the buyer. Quinn purchased the books under the second option and, 3 months later, gave them to a house of worship, which will use the books for religious purposes.Īt the time of the gift, the promoter was selling similar lots of books for either $10,000 or $30,000. According to the promoter, Quinn could then, within 1 year of the purchase, give the books to a qualified organization and claim the full $30,000 retail price as a charitable contribution. The principal and interest on the note would not be due for 12 years.

The promoter said that if Quinn wanted a charitable deduction within 1 year of the purchase, Quinn could buy the 500 books at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000.

The facts are the same as in Example 1, except that the promoter gave Quinn Black a second option.