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 [...]

Zarlengo v. Commissioner

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 [...]

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 [...]

Scheidelman v. Commissioner (Scheidelman IV)

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. [...]

Whitehouse Hotel Limited Partnership V. Commissioner (Whitehouse IV)

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 [...]

Chandler v. Commissioner

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 [...]

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 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 [...]

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 [...]

GRAEV v. COMMISSIONER

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 [...]