Tax Court - State law that limits easements to 99 years precludes “in perpetuity” conservation easement 

March 11:  The U.S. Tax Court today issued an opinion finding, in part, that state law (North Dakota) that limits the duration of an easement to not more than 99 years precludes a conservation easement from qualifying as being granted “in perpetuity” as required under section 170(h)(2)(C) or (5)(A). Wachter v. Commissioner, 142 T.C. No. 7 (March 11, 2014)

Read the Tax Court’s opinion [81 KB]

The parties agreed that, by operation of North Dakota law, the conservation easements will expire 99 years after they were conveyed. The Tax Court granted summary judgment on this issue for the IRS, holding that the easements were not restrictions granted in perpetuity and were thus not qualified conservation contributions.

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