Woolford v. Virginia Department of Taxation

Supreme Court of Virginia, Record No. 161095, November 22, 2017: Appraiser qualified due to experience with similar properties, even if experience is weak.

At issue was whether the appraiser of a Virginia conservation easement donation was a “qualified appraiser” under relevant Virginia and federal law.

The Woolfords donated a conservation easement to the Virginia Outdoors Foundation. The easement [...]

Mountanos v. Commissioner (Mountanos II)

U.S. Court of Appeals, 9th Circuit, No. 14-71580, June 1, 2016: Upholds Tax Court decision about highest and best use.

In the Tax Court decision Mountanos v. Commissioner, T.C. Memo. 2013-138, June 3, 2013 (Mountanos I), the tax court agreed with the IRS that a federal tax deduction should not be allowed for a conservation easement Mountanos [...]

Legg v. Commissioner

U.S. Tax Court, 145 T.C. No. 13, December 7, 2015: Upholds IRS procedure for imposition of 40% accuracy related penalty on conservation easement overvaluation.

The issue in this case was about the internal procedure of the IRS when imposing an accuracy related penalty under Internal Revenue Code section 6662 for the misstatement of valuation of conservation easement [...]

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 [...]

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 [...]

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 [...]

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. [...]

Whitehouse Hotel Limited Partnership V. Commissioner (Whitehouse IV)

US Court of Appeals, 5th Circuit, No. 13-60131, June 11, 2014: Reliance on qualified appraisal and accountant advice can be good faith basis to avoid tax penalty, but tax court’s valuation decision upheld.

This decision is the fourth in this historic preservation façade easement tax case. The case began when Whitehouse made a charitable contribution of a [...]

Chandler v. Commissioner

U.S. Tax Court, 142 T.C. 16, May 14, 2014: Preservation easement valuation zero in historic district. 2006 carryover deduction claim subject to accuracy penalty.

At issue was the valuation for federal income tax deduction purposes of historic preservation façade easements on two single-family residences in Boston’s South End Historic District.  The question was whether the burdens imposed [...]

Palmer Ranch V. Commissioner

U.S. Tax Court, T.C. Memo. 2014-79, May 6, 2014: Rezoning history to old to affect highest & best use of conservation easement land; no penalty assessed.

At issue was the fair market value of a donated qualified conservation contribution based on the “highest and best use” of the land before imposition of the conservation easement. The appraisal [...]

Kaufman v. Commissioner (Kaufman IV)

U.S. Tax Court, T.C. Memo 2014-52, March 31, 2014: Façade Easement had zero value; penalties imposed.

The issues in this case about the federal tax deduction for a “qualified conservation contribution” (a historic preservation façade easement) were principally the valuation of the façade easement and what, if any, penalties the taxpayer should pay for misstating the value [...]

Esgar Corporation v. Commissioner (Esgar II)

U.S. Court of Appeals, Tenth Circuit, No. 12-9009, March 7, 2014: Highest and best use in easement appraisal must be most reasonably probable in the reasonably near future.

Esgar appealed the decision of the Tax Court in Esgar v. Commissioner (Esgar I), US Tax Court, 2012 TC Memo 35, February 6, 2012. In Esgar I the Tax [...]

Gorra v. Commissioner

US Tax Court, T.C. Memo. 2013-254, November 12, 2013: Preservation easement deductible despite similar restrictions in local New York City historic preservation law.

The court held that this façade easement for a “certified historic structure” qualifies for a tax deduction despite some overlap with New York City’s Landmarks Law. The decision offers reasons that the circumstances in [...]

Mountanos v. Commissioner of Internal Revenue

U.S. Tax Court, T.C. Memo. 2013-138,June 3, 2013: Deduction for conservation easement denied because more valuable highest & best use before donation not proven.

Taxpayer/petitioner (Mountanos) granted a conservation easement on an 882 acre California ranch in 2005 and claimed a deduction (spread over four years) of about $4.6 million for the value of the easement. The [...]

Scheidelman v. Commissioner (Scheidelman III)

U.S. Tax Court, T.C. Memo. 2013-18, January 16, 2013: Finds historic preservation façade easement in historic district did not diminish value of property.

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. [...]

Whitehouse Hotel Ltd. Partnership v. Commissioner (Whitehouse III)

US Tax Court, 139 T.C. No. 13, October 23, 2012: On remand from Appeals Court, historic preservation deduction reduced, penalty imposed.

The US Tax Court took another look at the objections of the Whitehouse Limited Partnership (Petitioner) to the IRS’ reduction of Whitehouse’s claimed charitable deduction for donation of a historic preservation easement, and the imposition of [...]

TROUT RANCH, LLC v. COMMISSIONER (Trout Ranch II)

United States Court of Appeals, Tenth Circuit, No. 11-9006, August 16, 2012: Upholds Tax Court’s value of conservation easement & use of evidence.

In the Tax Court case (Trout Ranch I, T.C. Memo. 2010-283; No. 14374-08, December 27, 2010. http://preservationlawdigest.com/2010/12/30/trout-ranch-llc-v-commissioner/), the taxpayer argued that only the comparable sales appraisal method could be used because data on sales [...]

Rolfs v. Commissioner of Internal Revenue II

US Court of Appeals, 7th Circuit, No. 11-2078, February 8, 2012: Upholds the Tax Court decision that value of house donated to fire department on condition it be destroyed did not exceed the fair market value of the benefit the taxpayer received in return by house’s destruction.

The opinion upholds the decision of the Tax Court in [...]