Ottawa Silica Co. v. United States

699 F.2d 1124 (Fed. Cir. 1983)

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Nature of the Case

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Facts

Ottawa (P) mined and marketed silica. P acquired various properties in Oceanside for that purpose in 1956. Eventually, P realized that the land was more valuable for commercial or residential development. To that end, it began plan development and bought two more additional properties to maximize land development opportunities. In the mid 60’s it became apparent that a new high school would be needed for the area and the District asked P if it would be willing to donate 50 acres. After long negotiations, P donated the site and another 20 acres for right of way access on two roads. P did this because the roads would be a major benefit in its development plans. P then claimed a $415,000 deduction for the land donated. It was conceded that the District was a political subdivision under 170(c)(1). The Government argues that no deduction was allowable as P had received a substantial benefit from the transfer.