A petitioner had a conservation easement on a large portion or about 85% of his property. As the owner, he decided to take a $2.2 million charitable deduction after he donated the conservation easement; the value was supported by a report from an appraiser. However, the IRS would not allow the petitioner to take the deduction because the conservation easement did not reduce the value of the petitioner’s property. The tax court disagreed with the IRS but only with regard to whether the property reduced the value of the property. The court would reduce the value of conservation easement to $560,000. The court did not accept the report issued by the appraiser.
In Trout Ranch LLC et al. v. Comm’r, the Tenth Circuit Court of Appeals found that the trial court was correct and affirmed the ruling.
See Valuation of Conservation Easement: Tenth Circuit Affirms the Tax Court’s Method of Valuation, Wealth Strategies Journal, Aug. 17, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
