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Building envelope on land6/15/2023 ![]() The easements permitted the owner to retain 16 one-acre sites within which to build homes and to move the locations of those building sites. The owner, a development partnership (which sold limited partnership interests to investors), then preserved the property with a sequence of three conservation easements in favor of the North American Land Trust (NALT), after which the partnership claimed approximately $33,376,000 in charitable tax deductions. The Pine Mountain property totals approximately 6,224.23 acres acquired piecemeal over a three-year period for $37,070,435. This right has been reserved by owners in many conservation easements over the past few decades and is only now under fire. Not so luckily, in the same opinion, the Tax Court chose to support a different problematic tool that the IRS has been using: the argument that an easement’s conservation purposes will not be preserved in perpetuity where the donor has reserved the right to build a homesite on property protected by a conservation easement and the easement permits the donor to move the location of the homesite somewhere else within the easement area boundaries. Accordingly, the inclusion of an amendment clause with appropriate limitations in a conservation easement is a “limiting provision” that is actually desirable. The Tax Court wisely noted that parties to a contract generally may amend the contract regardless of whether the contract explicitly permits the parties to do so. Luckily, the specious amendment argument was put to rest by the Tax Court in Pine Mountain. ![]() This argument is made even where, as in Pine Mountain, the amendment clause specifically says that no amendment is permitted where it would be inconsistent with the conservation purposes or could defeat the perpetual nature of the easement. One of the new tools the IRS is using to challenge conservation easement deductions is the argument that an easement with an amendment clause cannot protect its conservation purposes in perpetuity (as required by the Treasury Regulations) since, the IRS argues, the parties potentially could amend the easement to permit an act that would be destructive to the conservation values. That sigh of relief came with some bitter medicine regarding floating homesites. But alas, the Tax Court giveth and the Tax Court taketh away. 14 (December 27, 2018), the conservation community gave a collective sigh of relief because the court dismissed the IRS’s arguments challenging amendment clauses in conservation easements. Commissioner of Internal Revenue, 151 T.C. ![]() When the Tax Court issued its opinion in Pine Mountain Preserve, LLLP v.
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