Georgia landowner claimed $23m tax break; court backs $480,000 valuation
A US appeals court upheld a ruling against a Georgia landowner who claimed a $23 million tax deduction for a conservation easement based on an inflated valuation. The court agreed with the IRS that the land's potential use as a quarry was not a viable valuation factor.
Why it matters
The case serves as a significant legal precedent for how conservation easements are valued and audited by the IRS, discouraging aggressive tax avoidance schemes.
A Georgia landowner claimed a $23 million charitable tax deduction after donating a conservation easement over 103 acres of land. The valuation was based on the argument that the property’s 'highest and best use' before the easement was as an aggregate quarry. A US appeals court upheld a much lower valuation of $480,000 and a 40% gross valuation misstatement penalty.The case involves Savannah Shoals, LLC, which donated the conservation easement in 2017 on a 103-acre property in Hart County, Georgia, Reuters reported. On its tax return, the company claimed a $23 million charitable contribution deduction under Section 170 of the Internal Revenue Code.The company’s valuation depended on the proposed quarry use. It argued that the land could be used as an aggregate quarry before the conservation easement was placed on it.
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