Taxpayer Could Only Claim a Charitable Contribution for Amount of the Sales Price Distributed to the Church

Taxpayer X owned a tract of real estate that he agreed to sell to Y.

Bio

State: Federal
Categories: Charitable Contributions

Taxpayer X owned a tract of real estate that he agreed to sell to Y.

In order to avoid reporting all of the sales proceeds as income, X instructed the escrow officer to distribute a portion of the sales proceeds to First Church and then pay him the balance. The Tax Court, affirming a well-established tax principle, refused to let X avoid realization of the total sales proceeds through his "anticipatory assignment of income." X was required to report the total sales price as income, and then claim a charitable contribution for the amount of the sales price distributed to the church. Ankeny v. Commissioner, T.C. Memo. 1987-247.

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