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.

By  |  June 5, 2006; 12:17 PM ET  | Category:  Economy, Taxes , Environment , Government , History
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