                  T.C. Summary Opinion 2010-141



                      UNITED STATES TAX COURT



                MARIA ELENA TOWELL, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8002-09S.              Filed September 21, 2010.



     Maria Elena Towell, pro se.

     Mark J. Tober, for respondent.



     WELLS, Judge:   This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

when the petition was filed.1   Pursuant to section 7463(b), the




     1
      All section references are to the Internal Revenue Code
(Code) in effect for the year in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated. All amounts are rounded to the nearest
dollar.
                                - 2 -

decision to be entered is not reviewable by any other court, and

this opinion shall not be treated as precedent for any other

case.

     Respondent determined a deficiency in petitioner’s 2006

Federal income tax of $1,995.   The issues that remain for

decision are:   (1) Whether petitioner is entitled to a deduction

pursuant to section 170(a)(1) for a claimed $423 cash charitable

contribution; and (2) whether petitioner is entitled to a

deduction pursuant to section 170(a)(1) for a claimed $12,900

noncash charitable contribution.

                            Background

     Some of the facts and certain exhibits have been stipulated.

The stipulations of fact are incorporated in this opinion by

reference and are found accordingly.

     At the time the petition was filed, petitioner resided in

Florida.

     Petitioner purchased a timeshare interest (timeshare) for

$12,396 from Westgate Miami Beach, Ltd. (Westgate), on May 20,

2001.2   Petitioner executed a mortgage agreement with Westgate

for the purchase of her timeshare.      On October 12, 2004,




     2
      A timeshare interest represents an individual’s interest in
a jointly owned or rented property (such as a vacation
condominium) which is shared by several persons who take turns
occupying the property. Black’s Law Dictionary 1492 (7th ed.
1999).
                               - 3 -

petitioner made full payment and satisfaction of the mortgage

with Westgate.

     During 2006, petitioner donated her timeshare to Tracets

Foundation (Tracets).   Tracets, which claims to be a section

501(c)(3) foundation,3 is dedicated to preserving lakes and

streams for future generations.   Tracets “partnered” with

Wholesale Timeshare Services and eMidsouth, Inc., to coordinate

the transfer of the timeshare from petitioner.

     On November 30, 2006, petitioner signed a general warranty

deed transferring ownership of her timeshare to eMidsouth, Inc.

Petitioner did not have an appraisal of the value of the

timeshare made when it was transferred.   Petitioner attached Form

8283, Noncash Charitable Contributions, to her return for tax

year 2006.   On Form 8283, in the section for donated property of

$5,000 or less, petitioner listed the donation of her timeshare



     3
      Respondent does not challenge whether Tracets meets the
definition of an organization to which a contribution is eligible
for a charitable deduction. Sec. 170(c). Accordingly, we deem
that issue conceded.

     Because of respondent’s concession, an estimate of the
allowable deduction could be made. See Cohan v. Commissioner, 39
F.2d 540, 543-544 (2d Cir. 1930). The Court has not definitively
decided whether Cohan is available to estimate charitable
contributions. See Kendrix v. Commissioner, T.C. Memo. 2006-9
(finding that the Court has not yet squarely addressed the
inherent conflict between sec. 170(a)(1) and the application of
Cohan to unverified or inadequately substantiated charitable
contributions). However, because petitioner presented no
evidence on the value of the timeshare, there is no basis on
which to estimate an allowable amount.
                                - 4 -

to Tracets, stated that it had a fair market value of $12,900,

and stated that an appraisal was used to determine the fair

market value.

                            Discussion

     Deductions are a matter of legislative grace, and taxpayers

bear the burden of proving that they are entitled to the

deductions claimed.   See Rule 142(a); INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v.

Helvering, 292 U.S. 435, 440 (1934).4

     Section 170(a)(1) provides:   “There shall be allowed as a

deduction any charitable contribution * * * payment of which is

made within the taxable year.   A charitable contribution shall be

allowable as a deduction only if verified under regulations

prescribed by the Secretary.”   Generally, contributions of money

(cash, check, or other monetary gift), can be substantiated by

either a canceled check, a receipt, or other reliable written

records.5   Sec. 1.170A-13(a)(1), Income Tax Regs.   Additionally,


     4
      Petitioner has not raised any issue regarding sec. 7491(a);
and because she has failed to substantiate her claims or
introduce credible evidence for any of the issues, sec. 7491(a)
does not apply. See sec. 7491(a)(1) and (2)(A).
     5
      For contributions of money in any amount made during tax
years beginning after Aug. 17, 2006, taxpayers are required to
maintain a bank record or a written communication from the donee
showing the name of the donee organization, the date of the
contribution, and the amount of the contribution. Sec.
170(f)(17). There is no de minimis exception to the
recordkeeping requirement. Sec. 170(f)(17); see also sec.
                                                   (continued...)
                               - 5 -

for contributions of $250 or more, deductions are not allowed

unless the taxpayer substantiates the contribution by a

contemporaneous written acknowledgment by the donee

organization.6   Sec. 170(f)(8)(A).    The written acknowledgment

must include:

          (i) the amount of cash and a description (but not
     value) of any property other than cash contributed.

          (ii) whether the donee organization provided any goods
     or services in consideration, in whole or in part, for any
     property described in clause (i).

          (iii) a description and good faith estimate of the
     value of any goods or services referred to in clause (ii)
     or, if such goods or services consist solely of intangible
     religious benefits, a statement to that effect.

Sec. 170(f)(8)(B).   To be considered contemporaneous, the written

acknowledgment must be obtained by the taxpayer before the

earlier of the due date of the return, including extensions, or

the filing of the return.   Sec. 170(f)(8)(C).

     Petitioner failed to give testimony or offer documentary

evidence regarding her cash contribution.     Accordingly, we




     5
      (...continued)
1.170A-15(a), Proposed Income Tax Regs., 73 Fed. Reg. 45908,
45914 (Aug. 7, 2008). However, this section does not apply
because petitioner’s tax year began on Jan. 1, 2006.
     6
      Separate contributions of less than $250 are not subject to
the requirements of sec. 170(f)(8), regardless of whether the sum
of the contributions made by a taxpayer to a donee organization
during a taxable year equals $250 or more. See sec. 1.170A-
13(f)(1), Income Tax Regs.
                               - 6 -

sustain respondent’s denial of petitioner’s claimed deduction for

a cash charitable contribution of $423.

     Charitable contributions greater than $500 are subject to

heightened substantiation requirements.   Sec. 170(f)(11)(A)(i).

For noncash contributions greater than $5,000, a deduction is

allowed if a taxpayer:   “obtains a qualified appraisal of such

property and attaches to the return for the taxable year in which

such contribution is made such information regarding such

property and such appraisal as the Secretary may require.”

Sec. 170(f)(11)(C).   Section 170(f)(11) was added to the Code

pursuant to the American Jobs Creation Act of 2004, Pub. L. 108-

357, sec. 883, 118 Stat. 1631, to codify the substantiation

requirements previously addressed in the regulations and applies

to contributions made after June 3, 2004.   Smith v. Commissioner,

T.C. Memo. 2007-368, affd. 364 Fed. Appx. 317 (9th Cir. 2009).     A

qualified appraisal is conducted by a qualified appraiser in

accordance with generally acceptable appraisal standards and is

treated as a qualified appraisal under the regulations and other

guidance provided by the Secretary.7   Sec. 170(f)(11)(E).



     7
      Sec. 170(f)(11)(E) was amended by the Pension Protection
Act of 2006, Pub. L. 109-280, sec. 1219(c)(1), 120 Stat. 1085.
As amended, sec. 170(f)(11)(E) codifies the definition of
qualified appraisals and appraisers and is effective generally
for appraisals prepared with respect to returns or submissions
filed after Aug. 17, 2006. Id. sec. 1219(e). As petitioner’s
return was filed after Aug. 17, 2006, the amended sec.
170(f)(11)(E) applies.
                                   - 7 -

However, a deduction will not be denied if the failure to meet

the requirements of section 170(f)(11)(A)(i) is due to reasonable

cause and not willful neglect.       Sec. 170(f)(11)(A)(ii)(II).

     Petitioner failed to provide evidence of any appraisal of

her timeshare.    Petitioner testified that she never received an

appraisal from Westgate upon the purchase of her timeshare in

2001.   Regulations issued before the addition of section

170(f)(11) required the qualified appraisal to be made not

earlier than 60 days before the date of contribution and before

the due date of the original return, plus extensions, on which

the contribution is first claimed, or in the case of an amended

return, the filing date.       Sec. 1.170A-13(c)(3)(i)(A), Income Tax

Regs.   On October 19, 2006, the Internal Revenue Service issued

transitional guidance to provide a safe harbor for taxpayers in

conjunction with new section 170(f)(11)(E).       Notice 2006-96,

2006-2 C.B. 902.       The transitional guidance provides that the

requirements of section 1.170A-13(c), Income Tax Regs., that are

consistent with section 170(f)(11) still apply, including the

time limits.     Id.    Regardless of whether she received an

appraisal from Westgate in 2001, petitioner never obtained a

qualified appraisal of her timeshare in conjunction with her 2006

contribution to Tracets.       See sec. 170(f)(11)(C).   Moreover,

petitioner did not offer any reason for her failure to obtain a

qualified appraisal; therefore, petitioner has not proved that
                                 - 8 -

her failure to meet the requirements of section 170(f)(11) was

due to reasonable cause and not willful neglect.       Accordingly, we

sustain respondent’s denial of petitioner’s claimed deduction for

a noncash charitable contribution of $12,900.

     We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we conclude they

are without merit, irrelevant, or moot.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
