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Easement

Easement clause failed to protect charity in perpetuity, so no charitable deduction

Easement clause failed to protect charity in perpetuity, so no charitable deduction

Carroll, (2016) 146 TC No. 13 The Tax Court has held that a clause in an easement, which provided for the amount the donee would receive if conditions caused an extinguishment of the perpetual conservation restriction, did not meet the requirements of a reg under the charitable deduction Code section that requires that a conservation […]

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Court of Appeals – Courts need not accept either party’s position when valuing property

Court of Appeals – Courts need not accept either party’s position when valuing property

Palmer Ranch Holdings Ltd., (CA 11 2/5/2016) 117 AFTR 2d ¶ 2016-395 The Court of Appeals for the Eleventh Circuit has affirmed a Tax Court determination as to the highest and best use of property that was subject to an easement, but disagreed with the value that the lower court assigned to that highest and […]

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Tax Court – Examiner’s alternative position is “initial determination” for penalty assessment purposes

Tax Court – Examiner’s alternative position is “initial determination” for penalty assessment purposes

Legg, (2015) 145 TC No. 13 The Tax Court, siding with IRS, has upheld IRS’s imposition of 40% gross valuation misstatement penalties under Code Sec. 6662(h). The Court rejected the taxpayers’ argument that IRS didn’t make an “initial determination” regarding the penalties within the meaning of Code Sec. 6751(b), finding that the examination report issued […]

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Court of Appeals, 9th Circuit affirms: late mortgage subordination doesn’t save easement deduction

Court of Appeals, 9th Circuit affirms: late mortgage subordination doesn’t save easement deduction

Minnick, (CA 9 8/12/2015) 116 AFTR 2d ¶ 2015-5137 The Court of Appeals for the Ninth Circuit, affirming the Tax Court, has upheld IRS’s disallowance of a qualified conservation contribution deduction for property subject to a mortgage where the taxpayers didn’t have a subordination agreement from the bank in place on the date of the […]

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Tax court: Preservation easement plus sale of development rights yielded no charitable deduction

Tax court: Preservation easement plus sale of development rights yielded no charitable deduction

Costello, TC Memo 2015-87 The Tax Court has held that a taxpayer could take no charitable deduction with respect to a land preservation easement that he granted to a county government as a condition for being able to sell development rights pertaining to that land. The Court found a lack of donative intent and also […]

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Cost of relocating easement must be capitalized into basis of low-income housing building

Cost of relocating easement must be capitalized into basis of low-income housing building

PLR 201515007 In a private ruling, IRS has concluded that the costs of relocating an easement to enable a low-income housing building to be constructed are capitalized under Code Sec. 263A into the cost of the building, not the underlying land. The relocating costs also are figured into the basis of the building for purposes […]

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First Circuit affirms penalty for deduction of worthless historic preservation easement on home

First Circuit affirms penalty for deduction of worthless historic preservation easement on home

Kaufman v. Comm., (CA 1 4/24/2015) 115 AFTR 2d ¶ 2015-677   The Court of Appeals for the First Circuit, affirming the Tax Court, has held that taxpayers were liable for the substantial valuation misstatement penalty for an underpayment caused by a deduction for the charitable contribution of an easement. The donation of the façade […]

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Statutory change barred donors from escaping penalty on easement carryover deduction

Statutory change barred donors from escaping penalty on easement carryover deduction

Edward M. Reisner and Manda K. Weintraub, TC Memo 2014-230 The Tax Court has found that a married couple was liable for a gross valuation misstatement penalty with respect to a charitable contribution of an easement that was ultimately found to be worthless. The contribution was made in 2004, and they claimed carryover deductions to […]

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Tax Court re-values easement & illustrates “proper” application of valuation method

Tax Court re-values easement & illustrates “proper” application of valuation method

Schmidt, TC Memo 2014-159. The Tax Court has re-valued an easement that a taxpayer donated on land that he intended to develop and subdivide, but on which he ultimately just constructed a single personal residence.The Court disagreed with aspects of the valuation methodology employed by both parties’ experts and provided a detailed and thorough account […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney