U.S. Tax Court Denies Developer Tax Deductions for Conservation Easement
By Caitlin Jones & A. J. Johnson
1 min read
Tax Credit Advisor July, 2006: The U.S. Tax Court in a recent decision denied a Northern Virginia developer $342,000 in federal tax deductions claimed for donation of a conservation easement, holding the facts and documents didn’t support the claim.
The developer placed and donated a conservation easement on a 29-acre site in Fairfax County and claimed it reduced the property’s market value by $3.1 million and the number of homes that could be built from 62 to 30. But the judge said construction was barred on half the site because of flood plain status, and zoning and historic district restrictions limited the rest to 30 residential lots.
Washington, D.C. lawyer Richard Nettler, of Robins, Kaplan, Miller & Ciresi LLP, told the Tax Credit Advisor the recent decision was helpful in that it clarified what needs to be in the documents to support a tax deduction for a conservation easement.
