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Cottonwood Place LLC v. Commissioner (T.C. Memo. 2020-115)

On August 4, 2020, the Tax Court issued a Memorandum Opinion in the case of Cottonwood Place, LLC v. Commissioner (T.C. Memo. 2020-115). The primary issue before the court in Cottonwood Place was whether the IRS properly disallowed the charitable contribution deduction with respect to the donation of a conservation easement in full because the conservation purpose underlying the easements was not “protected in perpetuity” as required by IRC § 170(h)(5)(A), insofar as the charitable grantee was not absolutely entitled to a proportionate share of the proceeds in the event the property was sold following a judicial extinguishment of the easement.

The questions of law are identical to those presented in PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d 193 (5th Cir. 2018); Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. No. 10 (May 12, 2020); Coal Prop. Holdings, LLC v. Commissioner, 153 T.C. 126 (2019); Oakhill Woods, LLC v. Commissioner, T.C. Memo. 2020-24; and Belair Woods, LLC v. Commissioner, T.C. Memo. 2018-159.

For a complete discussion of the challenge to the application and validity of the regulations, which was basically summarized and reprinted in this case, see Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. No. 10, *7 (May 12, 2020) and Oakbrook Land Holdings, LLC v. Commissioner, T.C. Memo. 2020-54 (May 12, 2020).

(T.C. Memo. 2020-115) Cottonwood Place, LLC v. Commissioner

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