Case: Taxpayer Entitled to Charitable Contribution Deduction, Liable for Gross Valuation Misstatement Penalty (T.C. Memo) (IRC §170)

Taxpayer was entitled to a charitable contribution deduction of $193,250 for its donation of a conservation easement but was liable for a 40% gross valuation misstatement penalty under I.R.C. §6662(h), the U.S. Tax Court held. Taxpayer, a limited liability company, donated a conservation easement on 85 acres of mostly vacant land that contained an abandoned granite quarry and claimed a $21,972,000 deduction on its tax return, which the IRS disallowed in full. The court held that, despite concerns regarding valuation, the appraisal attached to Taxpayer’s return was “qualified” under §170(f)(11)(E)(i) and all other requirements for claiming a noncash charitable contribution ...