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 [...]

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 [...]

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 [...]

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 [...]

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 [...]

Glass v. Van Lokeren

Mich. Court of Appeals,  No. 302385, March 25, 2014: Land trust did not tortuously interfere with owners business relationships.

In this litigation, the Glasses, who were subject to an unsuccessful attempt by the IRS to disallow a federal income tax deduction for a conservation easement the Glasses donated to the Little Traverse Conservancy Trust (LTC) (Glass v [...]

Wachter v. Commissioner

US Tax Court, 142 TC 7, March 11, 2014: No federal tax deduction for conservation easement when state law limits easement to 99 years.

Wachter, in a bargain sale transaction, donated to a land trust a portion of the value of a conservation easement on North Dakota land. Wachter claimed a tax deduction for donation of a [...]

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 [...]

Van Liew v. Chelmsford

Mass. Appeals Court, No. 13-P-145, February 28, 2014: No municipal duty to enforce preservation easement; no standing for mandamus declaratory judgment.

Van Liew brought a mandamus action against the Selectmen of Chelmsford, MA, to require them to enforce a preservation easement. (In Massachusetts, Preservation easements and conservation easements are governed by the same statute, M.G.L. chapter 184, [...]

Tax Exempt Status Revoked; Letter Ruling 201405018

IRS, Written Determination 201405018, January 31, 2014: 501(c)(3) status of organization that received three conservation easements revoked due to numerous irregularities.

Private Letter Ruling 201405018 available at http://www.irs.gov/pub/irs-wd/1405018.pdf. A full description and explanation of the revocation written by Prof. Nancy A. McLaughlin is featured at the Nonprofit Law Prof Blog posting “IRS Rules Tax-Exempt Status of Organization [...]