This is a landmark ruling in that it strongly endorses the use of highest-and-best-use subdivision analysis for the before valuation.
And the values that were upheld were quite substantial – in excess of $200,000 per acre. Also – earlier segments of this case confirmed the qualification of the land trust – NALT - and cleared the conservation purposes test – on a golf course!
In Kiva Dunes Conservation LLC et al. v. Commissioner; T.C. Memo. 2009-145; No. 13196-06 (22 Jun 2009), the Tax Court approved the deduction for a gift of a conservation easement.
On June 6, 1992, Mr. E. A. Drummond purchased a parcel in Alabama from the Resolution Trust Corporation (RTC). The RTC was selling at auction various properties recovered from banks and savings and loans that had become insolvent during the 1990 real estate crash. The purchase price for the 228 acre parcel was $1,050,000.
Mr. Drummond formed B&E Investments, LLC and elected to be taxed as a partnership. He conveyed the property to the partnership and commenced development of a resort community named Kiva Dunes. The resort community began selling lots in 1995.
In 2002, he transferred 140.9 acres of property on which was placed a golf course to the Kiva Dunes LLC. On December 31, 2002, Kiva Dunes, LLC transferred a perpetual conservation easement on the golf course to the North American Land Trust (NALT). Appraiser Claude Clark was hired to determine the value of the perpetual conservation easement and he claimed a contribution deduction value of $30,588,235. Kiva Dunes also made a $35,000 cash contribution to NALT.
The IRS denied the deduction and the Tax Court proceeding ensued.
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Make your nomination here
WSB-TV and The Trust For Public Land: Calling All Conservation-Friendly Citizens
Cox Conserves Heroes program to include public nominations, online voting
ATLANTA (May 26, 2009) — Do you know an everyday hero who is making great strides today to ensure a greener tomorrow? WSB-TV Channel 2, in partnership with The Trust for Public Land (TPL), today launched Cox Conserves Heroes - Atlanta, a national awards program to honor and celebrate conservation in everyday life. Cox Conserves Heroes-Atlanta is now accepting nominations. The Cox Conserves Hero, chosen by online consumer voting, will be awarded $5,000 to donate to the environmental nonprofit of his or her choice.
“The Trust for Public Land’s mission is to conserve land for people to use and enjoy forever, so we are thrilled to partner with Cox to identify and honor people who are making a personal difference in Atlanta,” said TPL’s Georgia Director, Helen Tapp. “We’re fortunate to have engaged citizens who want to be actively involved in creating more greenspaces, promoting environmental best practices and enhancing the quality of life in the metro area.”
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Forever Forests applauds Senators Max Baucus (D-MT) and Charles Grassley (R-IA) for introducing the Rural Heritage Conservation Act, S. 812
Atlanta, April 6, 2009: Two important bills – H.R. 1831 and S. 812 – have been introduced in Congress to make the enhanced conservation easement tax incentive permanent. Senators Max Baucus (D-MT) and Charles Grassley (R-IA) have already signed on as a co-sponsor of this legislation, which will aid in the protection of millions of acres of America’s agricultural lands, historic landscapes, natural resources and wide open spaces. The expiring incentive allows modest-income landowners to receive significant tax savings for donating conservation easements that permanently protect important resources on their land.
Importantly, the enhanced incentive is an invaluable conservation tool that Forever Forests has used to protect over 10,000 acres since it was first enacted in 2006. The tax savings have benefited many local landowners who have recently conserved their land with us; the incentive has also helped to increase landowner interest in working with us to conserve their land.
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April 9, 2003, Washington, DC - The U.S. Senate passed conservation tax incentives today as part of a bill to aid charities. The CARE bill (S 476) includes four such incentives. The bill will need to be approved by the House of Representatives before it becomes law. Section 106 of the CARE package allows landowners who donate a conservation easement to a nonprofit organization or government agency - permanently limiting the amount of development - to deduct the value of their gift over 16 years rather than the six years previously permitted. The bill also increases the amount that can be deducted in any one year from the current 30 percent of the donor’s income to 50 percent, with provisions allowing farmers and ranchers to deduct all of their income under certain circumstances.