The Court of Appeals for the District of Columbia, affirming the Tax Court, held that a partnership wasn’t entitled to a charitable contribution deduction for a remainder interest it contributed to a tax-exempt organization because it failed to comply with the substantiation requirements of Treas. Reg Sec. 1.170A-13(c). The Court also determined the claimed charitable contribution deduction resulted in a gross valuation misstatement. The opinion summary is as follows:
GINSBURG, Senior Circuit Judge: RERI Holdings, LLC (RERI) claimed a charitable contribution deduction of $33 million on its 2003 federal tax return. The Internal Revenue Service determined that RERI was not entitled to this deduction and imposed a 40% penalty for underpayment of tax. RERI unsuccessfully challenged both rulings before the Tax Court, and now appeals to this court on a variety of grounds. For the reasons set forth below, we affirm the judgment of the Tax Court.Blau v. Commissioner, , No. 17-1266 (D.C. Cir. 2019)
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Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal..