Rev. Rul. 68-69

Revenue Ruling 55-138, C.B. 1955-1, 223, holds in part that the fair market value of property that is contributed to a charitable organization will be the replacement cost to the donor in his most favorable market.

Subsequent to the publication of Revenue Ruling 55-138, section 1.170-1(c)(1) of the Income Tax Regulations, adopted by T.D. 6285, filed March 13, 1958, C.B. 1958-1, 127, established a different definition of fair market value as follows:

If a contribution is made in property other than money, the amount of the deduction is determined by the fair market value of the property at the time of the contribution. The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. If the contribution is made in property of a type which the taxpayer sells in the course of his business, the fair market value is the price which the taxpayer would have received if he had sold the contributed property in the lowest usual market in which he customarily sells, * * *

Accordingly Revenue Ruling 55-138 is considered to have been modified to remove the replacement cost concept by section 1.170-1(c)(1) of the regulations.