Oakbrook Land Holdings LLC v. Commissioner T.C. Memo. 2020-54
On May 12, 2020, the Tax Court issued its Memorandum Opinion in Oakbrook Land Holdings LLC v. Commissioner, T.C. Memo. 2020-54 (Oakbrook I) concurrently with a full Tax Court opinion in Oakbrook Land Holdings v. Commissioner, 154 T.C. No. 10 (Oakbrook II). The issue presented in Oakbrook Land Holdings LLC v. Commissioner was whether Oakbrook’s conservation easement violated the “protected in perpetuity” requirement of IRC § 170(h)(5), as interpreted in Treas. Reg. § 1.170A-14(g)(6), because the donee’s share of the extinguishment proceeds (1) is based on a fixed historical value rather than a proportionate share, and (2) is reduced by the value of any improvements made by the donor. The separate but related issue in Oakbrook II was whether Treas. Reg. § 1.170A-14(g)(6) was a valid regulation under the Administrative Procedure Act (APA), 5 U.S.C. § 553 (2018) and under Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). You can find a copy of the Oakbrook II summary here. (more…)
