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 [...]

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 [...]

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 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 [...]

61 York Acquisition, LLC v. Commissioner

U.S. Tax Court, T.C. Memo. 2013-266, November 19, 2013: No historic preservation easement deduction when donor doesn’t have right to restrict entire exterior.

A historic preservation easement was donated by a partnership (the “Partnership”) on the façade of a building divided for ownership purposes into two segments: an “Office Property”, which consists of the first 14 floors [...]

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 [...]

Friedberg v. Commissioner (Friedberg II)

U.S. Tax Court, T.C. Memo. 2013-224, September 23, 2013: Appraisal deemed “qualified” on reconsideration, based on Scheidelman II decision.

 This case is a reconsideration of the Tax Court’s decision in Friedberg v. Commissioner, T.C. Memo. 2011- 238 (Friedberg I) in light of the US 2nd Circuit Court of Appeals decision in Scheidelman v. Commissioner, 682 [...]

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 [...]

Pesky v. US (Pesky III)

Dist. Court, D. Idaho, No. CIV. 1:10-186 WBS, July 8, 2013: Conservation easement deduction fraud penalty dismissed, other issues go to trial.

This decision is on motions for summary judgment (to decide the issues in question without proceeding to a trial about them) in the dispute between the IRS and the Peskys about whether, in light of [...]

Historic Boardwalk Cert Denied

U.S. Supreme Court, No. 12-901, 5/28/13: Supreme Court lets Historic Boardwalk Third Circuit decision stands.

The U.S. Supreme Court denied certiorari to Historic Boardwalk Hall LLC, letting stand the Third Circuit Court of Appeals decision in Historic Boardwalk Hall, LLC v. Commissioner of Internal Revenue, US Third Circuit Court of Appeals, No. 11-1832, decided August 27, 2012. [...]


U.S. Tax Court, 140 T.C. 17, June 24, 2013: Side letter promising termination of conservation easement disqualifies tax deduction.

 Before petitioner Graev donated a historic preservation easement and a cash stewardship contribution to National Architectural Trust (NAT) he requested and received from NAT a letter promising that if the IRS disallowed Graev’s charitable contribution deductions [...]

Belk v. Commissioner (Belk II)

US Tax Court, T.C. Memo. 2013-154,June 19, 2013: Reaffirms Belk I, denying tax deduction for conservation easement that allows substitution of entire property.

In Belk v. Commissioner, 140 T.C. 1 (Jan. 28, 2013) (“Belk I”), the Tax Court found that the Belk conservation easement permits the grantor and grantee, by agreement and subject to certain restrictions, [...]

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 [...]

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 [...]

Belk v. Commissioner

US Tax Court, 140 T.C. No. 1, January 28, 2013: Conservation easement with swap provision does not protect property in perpetuity; deduction denied.

At issue was the IRS’s denial of a “qualified conservation contribution” tax deduction for donation of a conservation easement on 184.627 acres of a golf course to Smoky Mountain National Land Trust. The legal [...]

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. [...]

Pesky v. US (Pesky II)

U.S. Dist. Court, D. Idaho, No. Civ. 1:10-186 WBS, January 7, 2013: Refuses to dismiss IRS claim for 75% penalty for conservation easement tax fraud.

The Peskys were denied a charitable deduction from income tax for the grant of a conservation easement to The Nature Conservancy (TNC) on land owned by the Peskys, and the IRS imposed [...]

Minnick v. Commissioner of Internal Revenue

U.S. Tax Court, 2012 T.C. Memo 345, December 17, 2012: Conservation easement deduction denied because mortgage not timely subordinated; 20% penalty upheld.

In 2006, Minnick granted a conservation easement to a land trust on a 74-acre parcel of land near Boise, Idaho. The land was subject to a mortgage that was not subordinated to the conservation easement [...]