October 22, 2020
A contract clause that allowed limited development on a conservation easement did not disqualify Alabama landowners from claiming tax deductions on the land donations, the Eleventh Circuit said Thursday, partly reversing a U.S. Tax Court decision.
A three-judge panel found that the deductions taken by Pine Mountain Preserve LLLP for land donated to the North American Land Trust met the standards under Internal Revenue Code Section 170 to qualify for the tax deduction. The easements are valid even though they allowed Pine Mountain limited rights to develop the land for some of the years in question, according to the appeals court.
The development clause didn’t violate that provision’s requirement that the land be protected in perpetuity, the court said.