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Tax Court Rejects New Defenses of Tax-Advantaged Land Donation

July 22, 2020, 9:24 PM

The U.S. Tax Court rejected new defenses in a dispute over a $4.8 million tax deduction for a conservation easement deed, ultimately ruling the tax-advantaged donation’s conservation purpose wouldn’t be protected in perpetuity.

Because the deed didn’t protect the purpose as required by tax code Section 170(h), the court said Belair Woods LLC couldn’t claim a tax deduction for donating the conservation easement, in which it gave away rights to develop land for conservation reasons.

The decision partly flowed from the court’s past decisions, including Oakbrook Land Holdings, LLC v. Comm’r and Coal Property Holdings, LLC v. Comm’r ...

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