George A. And Meryl Collman v. Commissioner of Internal Revenue

The Collmans appeal from a Tax Court decision allowing them only a partial charitable tax deduction for dedicating 2.549 acres of land for public roadway purposes. We reverse in part.

Factual Background

In October, 1965 Coliman, a citrus farmer, purchased 15 acres of real property (hereinafter “the 15-acre grove” or the “grove” in Orange County, close to the City of Anaheim boundary line. The 15-acre grove was a rectangular piece of property, approximately 625 feet by 1000 feet. On the south it was bounded by Orangethorpe Avenue. On the east and west it was bounded by groves owned by a man named Morlock. A street named Orchard Drive originated north of the grove and ran south until it reached the center of the northern border of the grove. Prom that point it turned and ran east, for approximately 690 feet, at which point it again turned south, eventually terminating at Orangethorpe Avenue.

The grove was zoned for agricultural use. After purchasing it, the Collmans invested time and money to improve the grove for the growing of orange trees. In 1965, appellants netted a profit on their farm operation, but in each of the succeeding years they suffered a loss.

In 1965,…