Unpublished Disposition, 911 F.2d 738 (9th Cir. 1990)

MEMORANDUM^** 

William and Ellen Roberts appeal the decision of the Tax Court which upheld the Commissioner's disallowance of taxpayers' total business expense and a portion of their charitable contribution deductions for the tax years of 1983 and 1984. We Affirm.

Reduced to its essence, taxpayers argue that Mr. Roberts is engaged in an "information business" that is building the "best entrepreneurial library in the world" which will provide a "total productive employment system." Taxpayers claimed business expense deductions of $5,722 for 1983 and $4,818.46 for 1984. The first issue is whether taxpayers were engaged in a trade or business within the meaning of I.R.C. Sec. 162(a) (1988) or had incurred ordinary and necessary expenses "for the production or collection of income" within the meaning of I.R.C. Sec. 212(1) (1988). The Tax Court resolved this issue against the taxpayers. We agree. Mr. Roberts had collected and stored many books and without doubt had ideas as to how this material could be used. His difficulty, however, was that these ideas were never implemented by action looking to a realization of financial gain. We shall not repeat the Tax court's analysis of the facts that led it to its conclusion. No error appears in that analysis.

Not at issue in this appeal are the deductibility of the charitable contributions in cash for the years 1983 and 1984, as well as the non-cash charitable contributions of $995 for the year 1983 and $200 for 1984. The Commissioner has agreed to these deductions. However, taxpayers insist that they are entitled to a $67,235.35 non-cash charitable contribution carry over from the tax year 1982. This non-cash contribution can only be deducted to the extent of the item's fair market value at the time of contribution. 26 C.F.R. Sec. 1.170A-1(c) (1). Taxpayers have simply failed to substantiate the 1982 non-cash contribution by a showing of its fair market value. As the Tax Court recognized, Mr. Roberts "performed a valuable service by redistributing unwanted books and journals" to persons and groups who could use them. This alone does not impart a fair market value to the books and journals. Nor is personal service deductible as a non-cash charitable contribution. Mertens, Law of Fed. Income Taxation, Sec. 31.42 (1987).

AFFIRMED.