Not So Strict Construction: The Fifth Circuit Examines Conservation Easements

Conservation EasementsQualified conservation easements have generated a significant volume of litigation; the IRS takes a strict approach to enforcement, and there are a lot of technical details that taxpayers can trip over. On August 11th, a divided Fifth Circuit panel issued an interesting decision that ruled in favor of the taxpayer, while disavowing the customary approach of strictly construing the requirements for a deduction in the government’s favor. BC Ranch II, L.P. v. Comm’r, No. 16-60668, 2017 U.S. App. LEXIS 14947 (5th Cir. Aug. 11, 2017).

Background

The case involved a conservation easement on the Bosque Canyon Ranch, located in the Texas Hill country.… Read More