Chelsea Preserve, LLLP, Eddleman Properties, LLC, Tax Matters Partner, Petitioner - Appellant - Cross Appellee, versus COMMISSIONER OF INTERNAL REVENUE, Respondent - Appellee - Cross Appellant. 008956-13 PINE MOUTAIN PRESERVE, LLLP, f.k.a. USCA11 Case: 19-11795 Date Filed: Page: 1 of 25 IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No.
The court held that the 20 easements satisfy section 170(h)(2)(C)'s granted-in-perpetuity requirement that the existence of an amendment clause in an easement does not violate section 170(h)(5)(A)'s protected-in-perpetuity requirement and that the tax court applied the wrong method for valuing the 2007 easement. The Eleventh Circuit affirmed in part, reversed in part, and remanded for further proceedings.
The IRS denied the deductions and the tax court held that the 20 easements were not "granted in perpetuity" within the meaning of section 170(h)(2)(C) because, although Pine Mountain had agreed to extensive restrictions on its use of the land, it had reserved to itself limited development rights within the conservation areas that the 2007 easement complied with section 170(h)(5)(A)'s requirement that the easement's conservation purposes be "protected in perpetuity," notwithstanding its inclusion of a clause permitting the contracting parties to bilaterally amend the grant and that the value of the 2007 easement is $4,779,500-which, it turns out, is almost exactly midway between the parties' wildly divergent appraisals. After Pine Mountain granted North American Land Trust conservation easements, Pine Mountain claimed tax deductions for the easements under I.R.C.
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