IRS Interprets Conservation Easement Rule on Pre-Existing Use
ECC 202141022
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2021-39382
- Tax Analysts Electronic Citation2021 TNTF 199-342021 TPR 43-132021 EOR 11-18
- Magazine CitationThe Exempt Organization Tax Review, Nov. 2021, p. 35188 Exempt Org. Tax Rev. 351 (2021)
UILC: 170.14-00
Release Date: 10/15/2021
ID: CCA_2021090213553948
From: * * *
Sent: Thursday, September 2, 2021 1:55:39 PM
To: * * *
Cc: * * *
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Subject: re: pre-existing use quote from reg.
1.170A-14(a) sets out that “A qualified conservation contribution is the contribution of a qualified real property interest to a qualified organization exclusively for conservation purposes. To be eligible for a deduction under this section, the conservation purpose must be protected in perpetuity.”
1.170-14(e) is under the heading of “Exclusively for conservation purposes.”
1.170-14(g)(5)(ii), which requires notification, is under the heading of “Enforceable in perpetuity.”
This subsection states that “[T]he donor must agree to notify the donee, in writing, before exercising any reserved right [. . .] which may have an adverse impact on the conservation interests associated with the qualified real property interest.”
The language you quoted under (e)(3) might allow a preexisting use not to disqualify the deduction under “solely for conservation purposes” grounds, but my reading is that a lack of notification for exercising/continuing a preexisting use may be grounds for disallowance under “protected in perpetuity” grounds under (g)(5)(ii).
Thoughts?
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2021-39382
- Tax Analysts Electronic Citation2021 TNTF 199-342021 TPR 43-132021 EOR 11-18
- Magazine CitationThe Exempt Organization Tax Review, Nov. 2021, p. 35188 Exempt Org. Tax Rev. 351 (2021)