RP Golf V. Commissioner (RP Golf III)

U.S. Court of Appeals, Eighth Circuit, No. 16-3277, June 26, 2017: Upholds requirement of binding subordination at time of easement recording.

The court reviewed the facts and the tax court’s findings and holding in RP Golf v. Commissioner, 2016 T.C. Memo 80 (RP Golf II), and upheld the Tax Court. RP Golf, LLC claimed a charitable deduction on its 2003 tax return for donating an easement to the Platte County Land Trust (PLT). The tax courtagreed with the IRS that the easement failed the perpetuity requirement for a qualified conservation contribution under Tax Code 170(h)(5)(A) because subordinations of the recorded mortgages on the easement property were not recorded until after the easement was conveyed to the grantee. The court cited Mitchell v. Comm’r, 775 F.3d 1243, 1247 (10th Cir. 2015) in support.

In addition the court held that the tax court’s finding that RP Golf failed to prove the existence of oral subordination agreements was not clearly erroneous, and therefore the tax court’s decision could not be challenged on that ground.

Decision available at http://media.ca8.uscourts.gov/opndir/17/06/163277P.pdf.

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