WASHINGTON, June 4 (UPI) -- A U.S. Tax Court has issued what may be a historic ruling against a real estate manager, disallowing a $342,000 conservation easement deduction.
The ruling may have been the first time the type of write-off in question has been prohibited -- and could drastically limit the use of the deduction, which has been popular among wealthy investors.
The case came about when an Alexandria, Va., real estate company gave Fairfax County a $3.1 million donation and a promise not to develop land once owned by George Washington.
While the company did not develop the site, it did construct towering houses around it. The court ruled that was a violation, and when company manager James Turner tried to use the donation as write-off, the court ruled against his deduction and fined him and his wife $56,000.
"I think the IRS and the courts saw an opportunity to make a statement," said Stephen J. Small, an author who has written about easement law.
