A Tax Court decision denying a deduction for qualified conservation contribution to a limited liability company (LLC) was vacated and remanded by the 11th Circuit. The taxpayer developed and operated a golf club and had claimed a charitable deduction for donating a conservation easement over property that included a private golf course and undeveloped land.
The taxpayer argued that the word "significant" used in Reg. §1.170A-14(d)(3)(i) impermissibly departed from the conservation purpose requirement set out in Code Sec. 170. Further, the conservation easements across golf course qualified for a deduction because they met the otherwise-applicable standards. Moreover, the Tax Court’s implicit finding that the LLC did not contribute the easement "for the protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem" was based on erroneous finding of fact and was wrong as a matter of law.
In addition, the land still met the "rare, endangered, or threatened, or species" requirement because the land contained 61 species of birds on protected lists, as testified by the taxpayer’s and IRS’s experts. Finally, the appeals court held that the easement did preserve the scenic enjoyment of the public because the 10-foot river banks only blocked the view of the golf course, not the trees and wetlands.
Vacating and remanding the Tax Court, 116 TCM 262, Dec. 61,260(M), TC Memo. 2018-146.
Champions Retreat Golf Founders, LLC, CA-11
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