IRS scrutiny of charitable conservation easements

Until recently, conservation easements had received very little IRS attention. However, Notice 2004-41 and Rev. Rul. 2003-123, taken together with recent statements by IRS Commissioner Mark W. Everson (IR News Release 2004-86), indicate that the Service has apparently noticed the abundance of taxpay...

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Bibliographic Details
Published in:The Tax Adviser 2004-10, Vol.35 (10), p.603
Main Authors: McCollum, Victoria L, Thrasher, Bennett
Format: Magazinearticle
Language:English
Subjects:
Charitable contributions
Conservation easements
Donations
Gifts
Income taxes
Internal Revenue Code
Laws, regulations and rules
Regs. 1.170A-14
Section 170(h)
Tax deductions
Tax incentives
Tax regulations
Taxation
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Summary:Until recently, conservation easements had received very little IRS attention. However, Notice 2004-41 and Rev. Rul. 2003-123, taken together with recent statements by IRS Commissioner Mark W. Everson (IR News Release 2004-86), indicate that the Service has apparently noticed the abundance of taxpayers claiming substantial tax benefits from charitable conservation deductions and is concerned about abuse. With all of the attention directed at charitable conservation easements, taxpayers who are considering such transactions should be well informed about Sec. 170(h) and Regs. Sec. 1.170A-14, which discuss qualified conservation contributions. To qualify for a charitable deduction, a conservation easement must meet all of the criteria for a qualified conservation contribution. The rules for valuing an easement are outlined in Regs. Sec. 1.170A-14. Three traditional valuation methods are typically used, as appropriate: 1. comparable sales, 2. capitalization of income, and 3. replacement cost.
ISSN:0039-9957