Tax Court Tosses Treasury Rule on Conservation Easement Deed (1)

The US Tax Court ruled Thursday that a Treasury regulation used by the IRS to block a $14.8 million conservation easement deduction, based on the easement’s deed, is invalid under the Administrative Procedure Act.

Valley Park Ranch LLC, a partnership in Tulsa, Okla., that conveyed a 45.76-acre conservation easement to Compatible Lands Foundation in 2016, asked the court to vacate the regulation after the IRS disallowed its claimed $14.8 million tax deduction. The government said the partnership hadn’t established that it satisfied all the requirements for deducting a noncash charitable contribution, because the easement isn’t “protected in perpetuity” under the ...