Conservation Easement Tax Break Nixed by Court
In 1999 a real estate company promised not to overly develop land the company owned near George Washington's Historic Mount Vernon estate. In return for the conservation easement the company claimed hundreds of thousand of dollars in tax deductions. Last month the U.S. Tax Court ruled that the land, on which the company had erected 29 large houses, was not eligible for the deduction because the easement "did not protect open space or a historically important land area." A front page Washington Post story from yesterday is here.
This is the first time that a court had thrown out such a deduction and the decision is seen as an important one in light of the increasing popularity of conservation easements which are favored by historic and environmental preservation groups and seen by many investors as an attractive way to ease their tax burdens.
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June 5, 2006; 12:17 PM ET
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Posted by: Jim Foster | June 19, 2006 7:21 AM
I tend to agree with the court - this does not appear to have been a valid conservation easement. I'm not sure I'd read much more into the easement issue/decision than that. After all, most conservation easements will still be valid conservation easements, but this decision will have the valuable effect of making sure future ones pass the laugh test.
Supervisor Hyland comes off looking foolish and careless for signing a letter penned by the developer and related to a tax break that did not pan out. One should always carefully read what one signs and ensure that the underlying representation is true. That is especially true if one is an attorney -and-an elected public official.
Tsk, tsk.
Posted by: Anne | June 23, 2006 9:18 AM
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I think this is the item that was in the Washington Post, speaking about involvment of a Fairfax County supervisor.
I read and re-read the article. I could see nothing wrong. All I could see was that the supervisor was trying to get a builder to build fewer homes on a site.
What's wrong with that?