Showing posts from December, 2019

Tax Litigation: Tax Court Denies Conservation Easement Deduction

For landowners, donating a conservation easement is a way to protect places they love. It’s also a major financial decision.  Done right the tax incentives may offset some of that loss in property value, making conservation a viable option for more landowners.  However, done wrong, the IRS may reign down on the transaction to deny the deduction as an abusive tax transaction.

In a recent case, the United States Tax Court ruled a limited liability company (LLC) was not entitled to charitable contribution deduction because the conservation purpose of the easement was not "protected in perpetuity" as required by Code Sec. 170(h)(5)(A). The taxpayer had donated a conservation easement to a qualified charitable organization. The easement deed provided that, if the property were sold following judicial extinguishment of the easement, the donee organization would receive a share of the proceeds, "after the satisfaction of prior claims," determined by a formula.
The easement …

Tax Flash : Summary of 2019 Property Tax Changes

This is a summary of 2019 legislation affecting property taxes issued by the BOE on December 4, 2019. All bills become effective January 1, 2020, unless otherwise specified.

AB 46 (Carillo), Chapter 9
Among others, amends section 253 of the Revenue and Taxation Code.
Veterans' Exemption. Replaces mental illness terms with more culturally sensitive terms and replaces gender references with gender neutral references.

AB 587 (Friedman), Chapter 657
Adds section 65852.26 of the Government Code.
Sale of Accessory Dwelling Unit. Allows an accessory dwelling unit to be sold or conveyed separately from the primary residence to a qualified buyer if all of the following are met:

The property was built or developed by a qualified nonprofit corporation receiving the welfare exemption;

A recorded contract exists that imposes an enforceable restriction upon the sale that ensures the property will be preserved for affordable housing for 45 years for owner-occupied housing;

The property is held pursuant t…

IRS Criminal Investigation releases Fiscal Year 2019 Annual Report; celebrates 100 years

IR- 2019-199
Internal Revenue Service: Criminal Investigations Division (CID): 2019 annual report

WASHINGTON — The Internal Revenue Service today released the Criminal Investigation Division's (CI)annual report, highlighting significant successes and criminal enforcement actions taken in fiscal year 2019. The report also commemorates CI's 100th year anniversary as a law enforcement agency.
“CI is critical to the overall enforcement efforts of the IRS in pursuing its Mission in a fair, impartial, diligent and, where appropriate, tenacious manner.” said IRS Commissioner Chuck Rettig. “The Fiscal Year 2019 Annual Report summarizes various CI activities throughout the year but vastly understates the importance of CI to the overall IRS mission. CI supports the efforts of compliant taxpayers by visibly demonstrating the risks of noncompliance thereby helping otherwise honest taxpayers stay honest and compliant.”
Key focuses of CI in fiscal year 2019 included cybercrimes, with…