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 [...]
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 [...]
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 [...]
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 [...]
U.S. Tax Court, T.C. Memo. 2016-1, January 4, 2016: No preservation easement tax deduction unless appraisal filed with tax return.
Gemperle, the taxpayer (petitioner), claimed a federal income tax deduction for 2007 and 2008 for the contribution of a historic preservation easement on the façade of a Chicago home. Contrary to the requirements of the Internal Revenue [...]
U.S. Tax Court, T.C. Memo 2015-236, December 9, 2015: Golf course conservation easement doesn’t qualify for deduction.
The Tax Court held that contribution of certain conservation easements on land at the subject golf course do not qualify for a Federal income tax charitable deduction because they do not meet the conservation purposes requirement of the tax Code, [...]
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 [...]
US Court of Appeals Ninth Circuit, No. 13-73234, August 12, 2015: Mortgage subordination at the time of easement gift, not later, required for deduction.
The US Tax Court held in Minnick v. Commissioner (Minnick I), 2012 T.C. Memo 345, December 17, 2012, that Treasury Regulations §1.170A-14(g)(2) requires that, for a taxpayer to take a deduction for the [...]
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 [...]
Court of Appeals, 1st Circuit, No. 14-1863, April 24, 2015: Penalty upheld for gross valuation misstatement.
The Kaufmans’ claim of a federal income tax deduction for donating a historic preservation easement (“preservation restriction” in Massachusetts) was denied after multiple court proceedings culminating in the Tax Court finding that the value of the easement was zero and that [...]
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 [...]
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 [...]
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), [...]
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 [...]
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 [...]
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 [...]
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 [...]
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. [...]
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 [...]
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 [...]