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 [...]

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 [...]

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), [...]

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 [...]

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 [...]

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 [...]

Mitchell v. Commissioner (Mitchell II)

US Tax Court, T.C. Memo. 2013-204, August 29, 2013: Kaufman III is about post-extinguishment proceeds, not subordination. Reconsideration of Mitchell I denied.

In Mitchell v. Commissioner, 138 T.C. 324 (2012) (Mitchell I) Mitchell granted a conservation easement to the Montezuma Land Conservancy (Conservancy) but it was not until two years after the grant was donated and recorded [...]

Carpenter v. Commissioner (Carpenter II)

US Tax Court, 2013 T.C. Memo 172, July 25, 2013: Reconsideration denied, Kaufman III not applicable. Judicial extinguishment mandatory for conservation easements.

In Carpenter v. Commissioner, 2012 T.C. Memo 1 (Carpenter I), the Tax Court held that a Colorado conservation easement extinguishable by mutual consent of the parties does not guarantee protection in perpetuity under state [...]

Pollard v. Commissioner

US Tax Court, T.C. Memo. 2013-38, February 6, 2013: Conservation easement granted to get subdivision permit is quid pro quo, not deductible.

The reader is referred to the excellent summary of this decision at the Nonprofit Law Prof Blog, February 7, 2013, contributed by Prof. Nancy A. McLaughlin. “The Tax Court sustained the IRS’s disallowance of a [...]

Irby v. Commissioner

US Tax Court, 139 T.C. 14, October 25, 2012: Allows deduction for conservation easement despite technical anomalies of easement, appraisal and gift acknowledgment.

The issues in this tax case were: (1) Were the conservation purposes of a conservation easement protected in perpetuity even though the easement required that in the event of judicial extinguishment, most of the [...]

Mesa County Land Conservancy, Inc. v. Allen

Colorado Court of Appeals, Division VII, No. 11CA1416, June 7, 2012: Encumbrance of water rights in a conservation easement is valid in Colorado; enjoins severance of water rights from conserved land.

The United States granted a conservation easement in 1990 to Mesa County Land Conservancy, Inc. (Mesa), a land trust. The conservation easement provided that water rights [...]

KOWALCHIK v. BROHL (Brohl II)

Court of Appeals of Colorado, Division A, No. 11CA2634, March 15, 2012: Resolution of litigation regarding Colorado conservation easement tax credits between Dept. of Revenue and the original donor of the easement as tax matters representative is binding on transferees of the CE credits; transferees are not necessary parties to such disputes and need not be [...]

KOWALCHIK v. BROHL

Colo. Court of Appeals, Div. A, No. 11CA2634, February 2, 2012: Grants request for interlocutory appeal of four issues of law of first impression in Colorado regarding tax treatment of purchase of conservation easement tax credits. A later opinion will address the merits.

In the case at trial, the plaintiffs collectively donated fourteen conservation easements over two [...]

Carpenter v. Commissioner of Internal Revenue (Carpenter I)

US Tax Court, T.C. Memo. 2012-1, January 3, 2012: Colorado conservation easement extinguishable by mutual consent of the parties does not guarantee protection in perpetuity under state law as required by Internal Revenue Code.

Petitioners (Carpenter) sought a federal qualified conservation contribution tax deduction for a conservation easement granted to a charitable nonprofit that the IRS agreed [...]

Land Owners United, LLC v. Waters

Court of Appeals of Colorado, Division VII, No. 10CA1006, August 18, 2011: Affirms district court order requiring state to disclose records about an investigation of conservation easements appraisals used to obtain Colorado tax credits.

The Colorado Division of Real Estate and the Board of Real Estate Appraisers (collectively the Board), in connection with a statewide investigation of [...]

McNeil v. COMMISSIONER OF INTERNAL REVENUE

US Tax Court, T.C. Memo. 2011-109, May 23, 2011: Follows the holding in Tempel v. Commissioner (US Tax Court, 136 T.C. No. 15, April 5, 2011), that Colorado State conservation easement tax credits are capital assets that qualify for capital gain treatment and the holding period for the assets sold begins at the time that the [...]

TEMPEL v COMMISSIONER OF INTERNAL REVENUE

US Tax Court, 136 T.C. No. 15, April 5, 2011: Holds transferable Colorado conservation easement tax credits are a capital asset, but the transaction costs to establish the easement are not basis of the asset, and asset holding period began only when the easement donation was complete and the credits were granted by the state.

The Petitioner, [...]

Rocky Mountain Christian Church v Boulder County Cert Denied

The US Supreme Court denied certiorari January 10 in the case of Rocky Mountain Christian Church v Boulder County (reported here on May 25, 2010), a case decided by the United States Court Of Appeals  Tenth Circuit, No. 09-1188, May 17, 2010, involving claims under the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA). [...]

Trout Ranch LLC v Commissioner

T.C. Memo. 2010-283; No. 14374-08, December 27, 2010: Tax Court creates its own appraisal of the value of a conservation easement using the before-and-after method; considers evidence of lot sales after the date the easement was donated.

 

The taxpayer argued that only the comparable sales appraisal method could be used because data on sales of comparables conservation [...]