Court Opinion

ID: 9463067
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:57:27.552399+00
Date Added: 2024-06-11T17:37:55.408972
License: Public Domain

*789DAVID W. WILLIAMS, District Judge
(dissenting):
I respectfully dissent.
Far from being the subject of Allen’s great beneficence, the transfer of the 9.2 acres was actually a demonstration of his cunning. The benefits Allen derived from conveying the land to the .City are obvious. First, he preserved the stand of trees which he cherished and which made his new development more attractive to prospective plot purchasers. Second, it took the land off the tax rolls. Third, it alleviated opposition to his project which came from local density-conscious citizens who blocked his first map. Finally it moved the city council to approve his new map and allow rezoning. The council’s insistence upon referring to the transfer of the acreage in its rezoning resolution (Exhibit D) shows a clear quid pro quo.
Allen sought to develop his 22 acre parcel with a clustered residential pattern of V2 acre plots. No rezoning would be necessary if he sold his land in one-acre lots, but to make the venture more profitable, he sought city permission to get the larger number of lots from his holdings. His first subdivision map was withdrawn because of local opposition; his second map was approved, but he withdrew it in favor of a third map which would give him even more lots to sell. The third map would give plaintiff 20 lots bounded in part by a 9.2 acre park parcel which he deeded to the city of Mill Valley on the same day his map was finally, approved. He now claims a $73,000 charitable deduction on his tax return for what he contends is a voluntary gift from him to the city. (26 U.S.C. § 170).
The standard for determining whether a donation qualifies for a gift deduction is set forth in C. I. R. v. Duberstein, 363 U.S. 278, 80 S.Ct. 1190, 4 L.Ed.2d 1218 (1960) and followed by this circuit in DeJong v. C. I. R., 309 F.2d 373 (9th Cir. 1962).
The value of a gift may be excluded from gross income only if the gift proceeds from a “detached and disinterested generosity” or “out of affection, admiration, charity or like impulses” and must be included if the claimed gift proceeds primarily from “the constraining force of any moral or legal duty” or from “the incentive of anticipated benefit of an economic nature.” (Emphasis mine) De-Jong at p. 379.
The case at bar seems governed by the holding in Stubbs v. U. S., 428 F.2d 885 (9th Cir. 1970) which found that the taxpayer’s dedication of land to the use of a road “ . . . was in expectation of the receipt of certain specific direct economic benefits within the power of the recipient to bestow directly or indirectly, which otherwise might not be forthcoming.” Anyone remotely familiar with municipal politics knows that a gift of part of the land sought to be rezoned is of utmost persuasion to the zoning authority.
Allen’s contention that he gave the 9.2 acres to Mill Valley solely to assure that the stand of trees on the land would be preserved and thus lend a park-like environment to the homes he would develop on the remaining land is hard to believe. He could have gained this assurance by retaining the title in his name and saving the trees, but this would have resulted in his getting a tax bill each year on the plot. He wanted so desperately to squeeze out four more lots than the second map would give him that he reduced the size of the “gift” park and got the third map approved by an agreement which resulted in a City Council Resolution (Exhibit D) which conditioned zone approval upon the contemporaneous conveyance by plaintiff to the city of the 9.2 acres. It was clearly erroneous to find that this quid pro quo manipulation was an act of charity by the grantor. USA v. Trans-America Corp., 392 F.2d 522, 524 (9th Cir. 1968). I would reverse.