Revenue Ruling 81-163
Internal Revenue Service
1981–1 C.B. 433 (1981)
- Written by Jamie Milne, JD
Facts
A taxpayer owned certain unimproved real property as a capital asset. The taxpayer’s adjusted basis in the property, meaning the taxpayer’s investment in the property, was $15x (with x being an unspecified multiplier). The taxpayer transferred the property to a charitable organization. At the time of the transfer, the property’s fair market value was $25x, and the property was subject to an outstanding mortgage of $10x. Consequently, the taxpayer made a charitable contribution of $15x, which was the fair market value minus the outstanding mortgage amount. The Internal Revenue Service issued a revenue ruling to clarify how to calculate the taxable gain the taxpayer recognized from the transaction.
Rule of Law
Issue
Holding and Reasoning ()
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