On May 10, 2022, the Colorado Legislature passed SB22-208, titled “Concerning Just Compensation for the Condemnation of Property Encumbered by a Conservation Easement in Gross.”  If signed, the bill ensures that if property encumbered by a conservation easement will be condemned, and the property will be acquired free and clear of the conservation easement interest, the condemning authority must value the property as if it is unencumbered by the conservation easement.  The bill moves on to the governor’s desk for signing.
Continue Reading Colorado Legislature Passes Bill for Valuation of Conservation Easement Properties in Condemnation Actions

On March 14, 2022, the U.S. Court of Appeals for the 6th Circuit delivered its opinion in Oakbrook Land Holdings, LLC v. Commissioner regarding the proceeds clause in conservation easements.  The court upheld the Tax Court’s ruling in determining that the proceeds regulation for conservation easements in Treas. Reg. § 1.170A-14(g)(6)(ii) did not violate the

On December 29, 2021, in Hewitt v. Commissioner, the Court of Appeals for the 11th Circuit reversed the U.S. Tax Court’s decision regarding the proceeds clause set forth in Treas. Reg. Sec. 1.170A-14(g)(6)(ii).  Numerous cases decided by the Tax Court have determined that the proceeds clause in a conservation easement may not allow the

On October 15, 2021, the Office of Chief Counsel of the Internal Revenue Service (IRS) disclosed a copy of a communication in 202141022 suggesting that notification of the exercise or continuance of a use of land that pre-exists the donation of a conservation easement is required in order for the conservation easement to meet the

On July 30, 2021, the Office of Chief Counsel of the Internal Revenue Service (IRS) released a Chief Counsel Advice Memorandum 202130014 on the requirements of I.R.C. Section 170(h) and Treas. Reg. Section 1.170A014(g)(6)(ii) for an extinguishment proceeds clause in a conservation easement.  Citing PBBM-Rose Hill, Ltd. v. Commissioner and Coal Property Holdings, LLC v.

On June 23, 2021, the U.S. Court of Appeals for the 11th Circuit in TOT Property Holdings upheld the denial of a charitable deduction for a conservation easement on the grounds that the donated  conservation easement was not protected in perpetuity under I.R.C. § 170(h)(5)(A).  The denial was based once again on an improper proceeds

On April 19, 2021, the Internal Revenue Service (IRS) announced the formation of the Office of Promoter Investigations (OPI) (IR-2021-88) to increase the focus of the IRS on the promoters of abusive tax avoidance transactions, including abusive syndicated conservation easements.  The new OPI will coordinate the efforts of various business divisions, including Large

In a previous post, we noted that the Colorado Department of Revenue (CDOR) was considering revisions to conservation easement tax credit regulations, and on March 17, 2021, those revisions were adopted.  Rule 39-22-104(3)(g), Rule 39-22-304(2)(f) and Rule 39-22-522 will become effective on April 30, 2021.  As a reminder, the amendments are intended to conform the regulations to House Bill 19-1264 signed into law on June 3, 2019, which included a number of substantive revisions to the conservation easement enabling statute (C.R.S. § 38-30.5-101, et seq.) and the conservation easement tax credit program in Colorado.
Continue Reading Colorado Department of Revenue Adopts Revised Conservation Easement Tax Credit Regulations

Colorado Open Lands (COL) announced yesterday that the organization completed its 500th conservation project in Colorado this month.  COL has now conserved more than 585,000 acres in Colorado.  Congratulations to COL and to its dedicated staff, Board members and volunteers on this impressive milestone!

On November 25, 2020, the Internal Revenue Service (IRS) updated its Conservation Easement Audit Technique Guide with a revision date of November 9, 2020. The Guide is a reference document for IRS staff for the examination of charitable contributions of conservation easements.  Although the IRS is quick to point out that the Guide is not