Palmolive Building Investors v. Commissioner

U.S. Tax Court, 149 T.C. No. 18, October 10, 2017: Outside 1st Circuit, full subordination of mortgagee’s right to insurance proceeds is required to qualify for charitable deduction.

Contrary to the ruling of the U.S. Court of Appeals for the 1st Circuit in Kaufman v. Shulman, 687 F.3d 21 (2012) (Kaufman III), the Tax Court holds in [...]

Smith v. Westfield

Mass. Supreme Judicial Court, SJC-12243, October 2, 2017: Recorded restriction not needed for MA park’s constitutional protection.

Massachusetts highest court (SJC) held that state Constitution Article 97 protects land as a public park where there is a clear and unequivocal intent to dedicate the land permanently as a public park and where the public accepts such use [...]

BC Ranch II, LP v. Commissioner (Bosque Canyon II)

U.S. Court of Appeals, Fifth Circuit, No. 16-60068, Cons. w/16-60069, August 11, 2017: Conservation easement may OK boundary changes.

The Bosque Ranch’s two conservation easements were disallowed as charitable deductions by the Tax Court in 2015 because that Court held the conservation easements failed the perpetuity requirements of the Tax Code, § 170(h)(2)(C). Bosque Canyon Ranch LP [...]

Partita Partners LLC v. US (Partita II)

U.S. District Court, S.D. New York, No. 15-cv-2561(PKC), July 10, 2017: Disqualification of façade donation opens door to valuation misstatement penalty.

In 2008, plaintiff Partita Partners LLC (“Partita”) claimed a federal tax deduction of $4,186,000 for the donation of a preservation easement to the Trust for Architectural Easements in the façade of a building that Partita owns. [...]

Reri Holdings I, LLC v. Commissioner

U.S. Tax Court, 149 T.C. 1, July 3, 2017: Donor’s basis in donated property must be stated on Form 8283.

This decision does not involve a charitable donation of a conservation easement or historic preservation easement but does involve the same substantiation rules applicable to such donations.

Section 1.170A-13 of the Treasury Regulations includes substantiation requirements that apply [...]

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 [...]

RP Golf, LLC v. Commissioner (RP Golf II)

U.S. Tax Court, 2016 T.C. Memo 80, April 28, 2016: Mortgage subordination after recording of easement fails perpetuity test.

RP Golf, LLC (LLC) developed two private golf clubs. The purchase and development of the property was financed by loans secured by deeds of trust (mortgages) to Hillcrest and Great Southern banks. In December 2003, LLC (through its [...]

Ten Twenty Six Investors V. Commissioner

US Tax Court, 2017 TC Memo 115, June 15, 2017: Date of recording conservation easement determines year of eligibility for tax deduction.

The Tax Court agreed with the IRS that a conservation easement donated in 2004 but not recorded until 2006 did not create a qualified conservation contribution in 2004 and therefore did not entitle the donor [...]

Mount Aldie, LLC, v. Land Trust of Virginia, Inc.

Supreme Court of Virginia, Record No. 160305, March 2, 2017: Court picks which of 2 easement sections controls owner’s actions.

This decision resulted from a request for summary judgment as to whether a landowner had violated a conservation easement on its land. Each side in the dispute asserted that a different section of the easement controlled certain [...]

Estate of Robbins v. Chebeague & Cumberland Land Trust

Supreme Judicial Court ME, 2017 ME 17, January 26, 2017: Maine landowner doesn’t have standing to seek enforcement of conservation easement on land of another.

This case interprets a Maine statute to decide whether an owner of land subject to a conservation easement has standing to ask the courts to enforce the restriction as to another parcel [...]

15 West 17th Street LLC v. Commissioner

U.S. Tax Court, T.C. Memo. 2016-233, December 22, 2016: Preservation easement donee’s 990 cannot substitute for contemporaneous written acknowledgment letter.

The Internal Revenue Code requires that to qualify for a federal income tax deduction for contribution of a historic preservation easement or conservation easement valued at $250 or more, the taxpayer must substantiate the contribution by (among [...]

Ecotone Farm, LLC v. Ward (Ecotone IV)

U.S. Dist. Court, D. New Jersey, Civ. No. 2:11-5094(KM) (MAH), November 21, 2016: State law claims against conservation easement holder not dismissed.

The relevant cast of characters in this matter are Huff, managing member of Ecotone Farm LLC (Ecotone), the Plaintiffs; the Wards, neighbors to the farm property, Defendants; Fox, the Township Engineer, also a Defendant; and [...]

Boston Redevelopment Authority v. National Park Service (BRA II)

US Court of Appeals, First Circuit, No. 15-2270, September 23, 2016: Upholds NPS disapproval of Long Wharf restaurant use.

On appeal the court upheld the District Court decision in Boston Redevelopment Authority v. National Park Service (BRA I) 125 F.Supp.3d 325 (2015) in favor of the National Park Service (NPS), forbidding the Boston Redevelopment Authority (BRA) from using [...]

Crain v. Hardin County Water District No. 2

Court of Appeals of Kentucky, No. 2015-CA-000499-MR, June 17, 2016: Ag conservation easement does not create public use protected from taking.

The issues in this case are (1) whether a taking of an easement on private land for a sewer line by the Water District is prohibited because of an agricultural conservation easement which the landowner previously [...]

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 [...]

Telzrow v. US

U.S. Court of Federal Claims, No. 15-1359C, May 26, 2016: Trial may proceed on US liability for failure to remove mechanic’s lien.

This decision is about procedural matters but is reported here as an illustration of a problem that may not be addressed by the provisions commonly found in most historic preservation and conservation easements: mechanics liens.

The [...]

Carroll V. Commissioner

U.S. Tax Court, 146 T.C. 13, April 27, 2016: Formula for sharing post-extinguishment proceeds must conform exactly to IRS Regs.

Despite the federal Tax Code and Treasury Regulations’ requirement that to be eligible for a tax deduction a donated conservation easement must be enforceable in forever and always (“in perpetuity”), the law recognizes the possibility that even [...]

Wetlands America Trust, Inc. v. White Cloud Nine Ventures

Supreme Court of Virginia, Record No. 141577, February 12, 2016: Conservation easement ambiguity resolved in favor of allowing construction.

This controversy arose because of construction activities and proposed uses of land subject to a conservation easement. The legal questions were whether a Virginia conservation easement should be construed “strictly” (i.e., narrowly) against restrictions on land, whether certain [...]

In Re: Nealon

U.S. Bankruptcy Appellate Panel, 1st Circuit, BAP NO. MW 15-035, Bankruptcy Case No. 14-40719-HJB, January 20, 2016: Homestead protection in Massachusetts depends on actual use of property when homestead arises, not owner’s intentions or the property’s subdivision.

This case is about whether the Massachusetts Homestead Act provides protection in bankruptcy for a debtor’s land adjacent to, but [...]

MECOX PARTNERS LP EX REL. GOLDMAN v. US

U.S. Dist. Court, SD New York, No. 11 Civ. 8157 (ER), February 1, 2016: Preservation easement recording date is contribution date in New York.

Mecox Partners LP (“Mecox”) donated a historic preservation easement and open space easement on property in New York State to a charitable organization. The deed of easement was fully executed in 2004, but [...]