Joe and Mary Bidwell are a married couple. The Bidwells owned 210 acres of land located near Charlotte, North Carolina. The land was located in an area where a great number of new houses and other buildings were being built. The Bidwells purchased the land several years ago as an investment. They intended to sell the land at a profit a few years later when less undeveloped land would be available in this high demand area. In April of last year, the Bidwells learned that the Charlotte Theater Company (CTC) wanted to build a new theater building and school in the area where their land was located. The Bidwells wanted to help the CTC which is a 501(c) 3 charitable organization. They agreed to donate the 210 acres of land to the CTC.

Is there any authority indicating what, if any, effect the mortgage has on the deductibility of the Bidwells contribution of the land to the CTC? What are relevant Code Sections, regulations, cases or rulings that pertain to this case?