Form 05-76 - Rulings Of The Tax Commissioner printable pdf download

Form 05-76 - Rulings Of The Tax Commissioner

Rulings of the Tax Commissioner

Document Number:

05-76

Tax Type:

Individual Income Tax

Brief Description:

Land Preservation Tax Credits

Topics:

Credits

Date Issued:

05/19/2005

Superseded by 05-122

May 19, 2005

Re: Ruling Request: Individual Income Tax

Virginia Outdoors Foundation

Dear ****************:

You requested a ruling on Land Preservation Tax Credits authorized under the Virginia

Land Conservation Incentives Act of 1999 (the "Act"). You wish to know whether a ruling

by the Internal Revenue Service that, for federal income tax purposes, a donation of a

particular land conservation easement does not qualify as a deductible charitable

donation under Internal Revenue Code ("IRC") § 170(h) would necessarily render the

donation ineligible for tax credits under the Act.

FACTS

From 2002 through 2004, easements were donated to the Virginia Outdoors Foundation

("VOF"). On the basis of these easements, Land Preservation Tax Credits were granted

to the donors. These easements lacked certain technical language that is required under

IRC § 170(h) and the Treasury Regulations promulgated thereunder. Specifically, the

easements from 2002:

1. Do not contain an extinguishment paragraph as required under Treasury

Regulation § 1.170A-14(g)(6); and

2. The provisions providing for enforcement of the easement do not comply with

Treasury Regulation § 1.170A-14(g)(5)(ii).

In addition, the easements from 2002 through 2004 fail to comply with Treasury

Regulation § 1.170A-14(g)(5)(ii) because:

1. Under most of the VOF easements, the landowner retained the right to build one

or more dwellings on the protected property;

2. Those retained rights may impair the conservation interests associated with the

property; and

3. Those rights generally are exercisable without prior notice to VOF.

Form 05-76 - Rulings Of The Tax Commissioner