Conservation Tools

In 1997, for the first time in more than a decade, Congress added to the law significant new tax incentives for voluntary land protection by private landowners. This article includes background information, how the law works, and important issues to consider.

Section 2055 of the Internal Revenue Code governs the charitable estate tax deduction. The requirements for the deduction and some of the issues that typically arise with charitable gifts at death are discussed here.

This 1989 decision by the United States Supreme Court confirmed that the quid pro quo test continues to survive as grounds for disallowance of a charitable contribution.

Guidance Regarding Appraisal Requirements for Noncash Charitable Contributions

This 2011 Tax Court opinion found that the requirement of a cash contribution as a condition of acceptance of a façade easement did not, by itself, result in a finding that the payment was non-deductible as part of a quid pro quo transaction.

A postmortem qualified conservation easement yields significant tax savings, and can provide a lasting legacy for the decedent and his heirs. In this article, Rhode Island attorney Robert G. Petix, Jr. analyzes the rules applicable to such easements, and shows planners how they can take a "second bite of the apple."

This briefing for the Senate Finance Committee provides an overview of the Federal tax treatment of charitable contributions and a discussion of economic issues relating to Federal tax incentives for charitable giving. 44 pages.

In Randal A. Schrimsher et ux. v. Commissioner; T.C. Memo. 2011-71; No. 945-09 (27 Mar 2011), the U.S. Tax Court determined that a claimed deduction of $705,000 for a façade easement would be denied due to a lack of a contemporaneous written acknowledgement.

This Tax Court decision disallowed a deduction for the contribution of a façade easement as well as the monetary contribution that accompanied the façade easement. The holding of the case was that the taxpayers failed to sustain their burden of proof that no benefit was received from the transaction.

The Federal Law Re Donations Of Conservation Easements (and other partial interests)

U.S. Treasury Regulations on Donations of Conservation Easements

To be recognized as a charitable contribution for federal tax purposes, donors must at a minimum demonstrate that they purposely transferred money or property to a qualifying charitable organization in excess of the value of any benefit received in return. That is the standard (the "excess value test") set by the United States Supreme Court in the 1986 American Bar Endowment (the "ABE") decision, which described the sine qua non of a charitable contribution as a transfer of money or property without adequate consideration.