IRS Shifts Focus to Original Landowners in Easement Disputes
Most battles over “syndicated” conservation easements focus on the partnerships that made the donations. This is logical because they took the key actions, claimed the tax deductions, and then allocated them to the partners. A recent case, Glade Creek Partner, shows that the IRS is looking at other parties, too. These include the original landowners, who contribute the property on which the easement is later donated. Why would the IRS scrutinize original landowners? How long they held the property and for what purpose directly affect the size of the charitable tax deduction.
This article explains the easement donation process, significance of property characterization, and three-round battle in Glade Creek Partner. This article observes that, in its efforts to reduce tax deductions from easements, the IRS is now looking to original landowners to determine whether the relevant property is both “long-term” and “capital gain” in nature.
This article explains the easement donation process, significance of property characterization, and three-round battle in Glade Creek Partner. This article observes that, in its efforts to reduce tax deductions from easements, the IRS is now looking to original landowners to determine whether the relevant property is both “long-term” and “capital gain” in nature.
About Hale E. Sheppard
HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a partner in the Tax Controversy Section of Chamberlain Hrdlicka. He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.
