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Tax Court Sides With IRS On $16 Million Land-Use Donation

Feb. 5, 2020, 9:55 PM

The Tax Court on Wednesday disallowed a $16 million tax deduction for a land-use donation because the property wouldn’t be perpetually protected from development.

The case involves a conservation easement, in which taxpayers can claim a deduction under tax code Section 170(h) for donating land or property to shield it from future development. Railroad Holdings LLC in 2012 tried to make the 452-acre donation of land in Aiken County, S.C. to the Southeast Regional Land Conservancy Inc.

Railroad Holdings claimed a $16 million deduction for the donation on its 2012 tax form, which the IRS disallowed upon ...

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