Tax Court Reverses Itself on Conservation Easement Regulations

In a Tax Court case released yesterday, the Tax Court now concludes an IRS regulation is invalid under the Administrative Procedure Act.

Photo by Federico Respini on Unsplash

The Tax Court had originally ruled in 2020 that Regulation 1.170A-14(g)(6)(ii) dealing with how proceeds from a sale of land subject to a conservation easement would be divided up among the landowner and the easement owner would be valid.

In the Valley Park Ranch LLC v. Commissioner case decided yesterday, the Tax Court reversed their earlier decision and now indicate that this regulation is invalid.