Minnick v. Commissioner of Internal Revenue (Minnick II)

US Court of Appeals Ninth Circuit, No. 13-73234, August 12, 2015: Mortgage subordination at the time of easement gift, not later, required for deduction.

The US Tax Court held in Minnick v. Commissioner (Minnick I), 2012 T.C. Memo 345, December 17, 2012,  that Treasury Regulations §1.170A-14(g)(2) requires that, for a taxpayer to take a deduction for the [...]

Bosque Canyon Ranch LP v. Commissioner

US Tax Court, T.C. Memo. 2015-130, July 14, 2015: Conservation easement deduction denied; inadequate baseline documentation; Belk violation.

Citing the precedent of the Belk II tax court memo, as affirmed by the Fourth Circuit decision in Belk III, the court denied any tax deduction for twin conservation easements that allowed for the alteration of boundaries between unrestricted [...]

Schaecher v. Bouffault

Supreme Court of Virginia, Record No. 141480,June 4, 2015: Accusation of conservation easement violation is not defamation in Virginia.

At issue was whether public accusations that a party violated a conservation easement is defamation in Virginia. The Plaintiffs, 3 Dog Farm, LC, and Happy Tails sought a special use permit to operate a boarding kennel of more [...]

In re: The Application of Living Word Bible Camp

Court of Appeals of Minnesota, Nos. A14-0464, 14-0481, A14-1224, A14-1225, April 6, 2015: Bible camp’s development not prohibited by conservation easement.

Two groups of realtors oppose Living Word Bible Camp’s (LWBC) plan to build a youth bible camp on a property of 283 acres, of which 84 acres is subject to a conservation easement owned by the [...]

Kaufman v. Commissioner (Kaufman V)

Court of Appeals, 1st Circuit, No. 14-1863, April 24, 2015: Penalty upheld for gross valuation misstatement.

The Kaufmans’ claim of a federal income tax deduction for donating a historic preservation easement (“preservation restriction” in Massachusetts) was denied after multiple court proceedings culminating in the Tax Court finding that the value of the easement was zero and that [...]

SWF Real Estate LLC v. Commissioner

Tax Court, T.C. Memo. 2015-63, April 2, 2015: Tax due on partnership’s easement tax credit allocation as disguised sale.

The prime issue in this case was how the IRS should treat a limited partnership transaction involving Virginia tax credits for the donation of a conservation easement, and the valuation for federal tax purposes of that donation. Also [...]

Ranch O, LLC v. Colorado Cattlemen’s Agricultural Land Trust

Court of Appeals of Colorado, Div. 1, No. 13CA2204, February 26, 2015: Land Trust keeps conservation easement despite error naming grantor.

The Land Trust accepted and recorded a deed of conservation easement (“Conservation Deed”) from one Craig J. Walker, an individual who, as it turned out, had overlooked that he had previously granted and recorded a deed [...]

Minnick v. Ennis

Idaho Supreme Court, No. 41663, 2015 Opinion No. 1, January 9, 2015: Statute of limitations on malpractice claim for lawyer’s failure to seek mortgage subordination before recording conservation easement runs from when IRS raised issue.

The Minnicks engaged the law firm Hawley Troxell as counsel for a real estate project. As part of the project the Minnicks [...]

Mitchell v. Commissioner

US Court of Appeals, 10th Circuit, No. 13-9003, January 6, 2015: No deduction for conservation easement without mortgage subordination at time of grant.

This decision affirms the US Tax Court decision in Mitchell v. Commissioner, 138 T.C. 324 (2012) (Mitchell I) (of which the Tax Court rejected reconsideration in Mitchell II, T.C. Memo. 2013-204, August 29, 2013), [...]

Belk v. Commissioner (Belk III)

US Court of Appeals, Fourth Circuit, No. 13-2161, December 16, 2014: Allowing property swap disqualifies conservation easement deduction.

The court upheld the Tax Court ruling in Belk v. Commissioner, 140 T.C. No. 1 (2013) (Belk I), that a conservation easement that allows the parties to change which property is subject to the easement does not qualify for [...]

McClure v. Montgomery County

Court of Special Appeals of Maryland, No. 1031, September Term, 2013, December 2, 2014: Conservation easement enforceable, civil penalty for violation valid.

The case concerns the validity and enforceability of a forest conservation easement (“FCE”) on a subdivision lot purchased by Appellant McClure and the authority of a County board to issue a corrective order and impose [...]

Markus v. Brohl

Colorado Court of Appeals, 3rd Div., No. 13CA1656, October 23, 2014: Colorado’s 4-year limitation on challenging a claimed conservation easement tax credit runs from when the credit is first claimed.

Colorado taxpayers may claim a state income tax credit, which may be carried forward for up to twenty years, for donating a qualifying conservation easement to a [...]

In Re Dekoning

US Bankruptcy Court, ED California Fresno Div., No. 13-16634-13-13, August 27, 2014: Conservation easement may not diminish market value of debtor’s residence in bankruptcy.

In this bankruptcy matter, the Debtor, Dekoning, sought to have the court accept a fair market value of his residence low enough so a mortgage holder would be deemed an unsecured creditor. The [...]

Francis Small Heritage Trust Inc. v. Town of Limington

Supreme Judicial Court of Maine, No. YOR-13-511, August 7, 2014: land fully devoted to conservation and free public access is tax exempt.

The Trust owns eleven contiguous parcels of land on and near Sawyer Mountain in Limington. Eight of the parcels are open space properties which are protected by conservation easements enforceable by third parties, including easements [...]

Zarlengo v. Commissioner

U.S. Tax Court, T.C. Memo. 2014-161, August 11, 2014: Recording of NY easement determines date of compliance with tax regs. Substantial compliance with appraisal date requirement adequate.

Marco Zarlengo (“Zarlengo”) and his ex-wife Merilyn Sandin-Zarlengo (“Sandin-Zarlengo) signed a “facade conservation easement” (historic preservation easement) in 2004, and it was recorded in 2005. They each claimed a qualified [...]

Schmidt v. Commissioner

U.S. Tax Court, 2014 TC Memo 159, August 6, 2014: Court makes its own valuation of conservation easement contribution.

At issue was the valuation of a conservation easement for the purposes of a federal income tax deduction for a “qualified conservation contribution.”  Both the taxpayer/petitioner and the IRS (respondent) introduced expert testimony and questioned the credibility of [...]

Avery v. Medina

Conn. Appellate Court, AC 36326, July 8, 2014: Stone wall is “permanent structure”

At issue was whether a stone wall erected by Medina, the defendant, at a location where a restrictive covenant between private parties prohibited construction of any “permanent structure,” was a permanent structure in violation of the covenant. A lower court agreed with Medina that [...]

In Re Flood Hazard Area Verification

NJ Super. Ct Appellate Division, Nos. A-5541-11T1, A-6364-11T1, June 20, 2014: Hearing required to amend conservation easement.

As of this writing the opinion is not approved for publication.

In 2001 the Italian American Sportsmen’s Club, Inc. (“IASC”) and developer Crestwood obtained approvals from the New Jersey DEP, including a wetlands transition area waiver (“the 2001 TAW”), to subdivide [...]

Seventeen Seventy Sherman Street, LLC v. Commissioner

US Tax Court, T.C. Memo 2014-124. June 19, 2014: quid pro quo for historic conservation easement not fully valued; deduction denied.

The claim by Seventeen Seventy Sherman Street, LLC (Petitioner) for a charitable deduction for a conservation easement it granted to a charitable organization was denied by the IRS. The Petitioner conceded that the grant of the [...]

Scheidelman v. Commissioner (Scheidelman IV)

US Court of Appeals, 2nd Circuit, No. 13-2650, June 18, 2014: evidence supports Tax Court; easement had no value for charitable contribution purposes.

The IRS denied Scheidelman a charitable deduction for a façade easement on a property in a New York City historic district. The Tax Court sided with the IRS in Scheidelman v. Commissioner, T.C. Memo. [...]