T.C. M em o . 2 0 2 0 -1 1 2

UNITED STATES TAX COURT

BELAIR W OODS, LLC, EFFINGHAM M ANAGERS, LLC, TAX M ATTERS PARTNER, Pet it i on er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 1 9 4 93 -1 7
. Fi l edJ u l y 2 2, 2 0 20
.

Dav i dM . W o o l dri d g e, Ro n al dLev i t t , Greg o ry P. Rh o des , an d M i ch el l e A. Lev in , fo r p et i t i o n er. Ch ri st o p h er D. Brad l ey , J as o n P. Op p en h ei m , J o h n W . Sh effi el d III, an d J o h n T. Arth u r, fo r res p on d en t.

M EM ORANDUM OPINION LAUBER, J u d g e: Th i s i s o n e o f m an y cas es i n thi s Co u rti n v o l v i n g ch ari
t ab l e co n tri b u t i o n d educt i o n s fo r co ns erv at i on eas em en ts . Cu rren t ly b efo re th e- 2
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[* 2 ] Co u rti s a m o t i o n fo r p art ial s u m m ary ju d g m en tfi l edb y

th e In t ern al Rev en u e Serv i ce (IRS o r res p o n d en t ). Res p o n den tco n t en d s thatth e ch ari t ab l e co n tri b u t i o n d educt i o n cl ai m edb y

Bel ai r W o o d s , LLC (Bel ai r), was p ro p erl y d i s al l o wedb ecau s e t h e co n s erv at i o n p u rp o s e u n d erl y i n g th e eas em en twas n ot“p ro t ect edi n p erp etu i ty ” as s ect i o n 1 7 0(h )(5 )(A) req ui res . 1 Th at i s s o , res po n d en t u rg es , b ecau s e t h e eas em en t d eedco n trav en es the req ui rem en tth atth e g ran t ee recei v e, i n th e ev en t the eas em en t i s ex t in g u i s h ed , a p ro p o rt i o n at e s hare o f t h e p ro ceed s up o n
an y s ub s equ en ts al e o f t h e p ro pert y . See s ec. 1 .1 7 0 A-1 4 (g )(6 ), In co m e Tax Reg s . 2 Th e qu es ti o n s p res en t edb y res p o n d en t ’ s m ot i o n are s ubs t an ti al l y s i m i l ar t o th o s e d eci d edad v ers el y

t o t h e t ax p ay ers i n PBBM -Ro s e Hi l l , Lt d . v . Co m m i s s i o n 1 Un l es s o th erwi s e i nd i cat ed , al l s tatu to ry referen ces are t o th e In t ern al Rev enu e Co de (Co d e) i n effect fo r t h e y ear at i ss u e, al l Ru l e referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an dPro cedu re, an d al l p arag rap h referen ces are t o th e p arag rap h s o f t h e d eedo f co ns erv at i o n eas em en t ati s s u e. W e ro un dm o n et ary am ou n t s t o th e n eares t d o l l ar.

2 Th i s i s th e t h i rdo pi ni o n we h av e i s s u edi n th i s cas e. In Bel ai r W o o d s , LLC v . Co m m i s s i o n er, T.C. M em o . 2 0 1 8 -1 5 9 , we h el dth atBel ai r fai l ed t o s at i sfy th e req u i rem en tth ati tat t ach a fu l l y -co m p let ed“ ap p rai s al s u m

m ary ” t o th e ret u rn o n wh i ch i t s d edu ct i o n was cl ai m ed . See s ec. 1 .1 7 0 A-1 3 (c)(2 )(i )(B), In co m e Tax Reg s. Ho wev er, we res erv edfo r t ri al th e qu es t i o n wh et h er Bel ai r co u l dex cu s e th i s fai l u re b y s ho wi n g th ati t“ [wa] s du e t o reas o n ab l e cau se an dn o tt o wi l l fu l n eg l ect . ” See s ec. 1 70 (f)(1 1 )(A)(i i )(II). In Bel ai r W o o d s, LLC v
. Co m m i s s io n er, 1 5 4 T.C. _

_ _ (J an . 6 , 2 0 2 0), we ad dres s ed , an dres o l vedm o st ly i n res p on d en t ’ s fav o r, the p art i es ’ d i sp u t e as t o wh et h er t he IRS h ad o b t ai n edt i m el y s up erv i s o ry ap p ro v al , as req u i redb y

s ect io n 6 7 5 1 (b )(1 ), fo r t he accu racy -rel at edp en al t i es i t d et erm i n edi n th i s cas e.- 3
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[* 3 ] er, 9 0 0 F.3 d1 9 3 (5 th Ci r. 2 0 1 8 ); Oak b ro okLan dHo l d i ng s , LLC v
. Co m m i s s i o n er, 1 5 4 T.C. _

_ (M ay 1 2 , 2 0 20 ); Co al Pro p . Ho l d in g s , LLC v
. Co m m i s s i o n er, 1 5 3 T.C. 1 2 6 (2 0 1 9); an dCarro l l v . Co m m i s s i o n er, 1 46 T.C. 1 9 6 (2 0 1 6). Bu t p et it i o n er al s o p ro ffers i n s up p o rto f i t s p o s i t i o n s ev eral arg u m en t s th atwe h av e n o tp rev i ou s ly ad dres s ed . Adh eri ng t o the an al y s es i n o u r p ri o r
o p i n i o n s , an dreject i ng th e ad d i t i o n al arg um en t s p et it io n er ad v an ces , we wi l l g ran t
res p o n d en t’ s m o t i o n. Back gro u n d Th ere i s n o d i s p u t e as t o th e fo l l o wi n g fact s , wh i ch are d rawn fro m th e p et i
t i on , th e p art i es ’ m o t i o n p ap ers , an dthe at tach edd ecl arat i o n s an dex h i b i t s . Bel ai r i s a Geo rg i a l i m it edl iab i l i ty co m p an y (LLC) t h ath as o p erat edatal l t im es as a p art n ers hi p fo r Fed eral i n co m e t ax p u rp o s es . Bel ai r h adi ts p ri n ci p al p l ace o f b u s i n es s i n Geo rg i a wh en i tfi ledi t s p et i t i o n . In Decem b er 2 0 08 Bel ai r acq ui red , b y co n tri b u t i o n fro m

HRH In v es t m en t s , LLC (HRH), a 1 4 5 -acre t ract o f l an di n Effi n g h am Co u n ty , Geo rg i a. OnDecem
b er 3 0 , 2 00 9 , Bel ai r d o n at eda co n serv at i o n eas em en t o v er 1 4 1 acres o f th attract t o the Geo rg i a Lan dTru st(GLT o r g ran t ee), a “ qu al i fi edo rg an i zat i o n ” fo r p u r-- 4
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[* 4 ] p o s es o f s ect io n 1 70 (h )(3 ). W e wi l l refer t o th i s 1 4 1 -acre t ract as th e
co n serv edarea o r t h e Pro p erty . Th e d eedo f eas em en twas reco rd edth e s am e d ay . 3 Th e eas em en td eedreci tes s ev eral co n s erv at i o n p u rp o s es , i n cl u di n g p ro m o t i on o f g o v ern m en t al p o l ici es s etfo rt h i n Geo rg ia’ s Un i fo rm Co n serv at i on Eas em en tActan d rel at edl aws . See Ga. Co de An n . s ecs . 4 4-1 0 ets eq ., 4 8 -7 -2 9 .1 2 (2 0 1 9). Th e d eedg en eral l y p ro h i b i t s co m

m erci al o r res i d en t ial d ev el o p m en t . Bu t i t res erv es cert ai n ri g h t s t o Bel ai r as g ran t o r, i n cl u di n g t h e ri gh t s t o co n duct
co m m erci al ag ri cu l tu ral an dt i m b er-h arv es t i n g act i v it i es wi th i n th e co n s erv ed area. Bel ai r al so res erv ed th e ri g h tt o co n s tru ctwi th i n th e co n s erv ed area “ a l i m i ted n um

b er o f n ew i m

p ro v em en t s .” Th es e i m

p ro v em en ts co u l di n cl ud e t h e d ev el o p m en to f “ wo o d s ro ad s ” fo r p erm i t tedag ri cu l tu ral an dfo res try act i v i t i es , co n st ru ct i o n o f ani rri g at i o n s y s t em cap ab l e o f i rri g at i n g up t o 2 0 acres , m ai n t en an ce o f ex i s t in g ro ad s , co n s tru ct i o n o f t wo p on d s fo r recreat i o n al p u r3 HRH o r i t s affi l i at es co n tri b u t edo th er t ract s o f l an di n Effi n g h am Co u n t y t o o th er LLCs , an dEffi n g ham M an ag ers , LLC, p et i t io n er i n th i s cas e, s erv edas t ax m at t ers p art n er fo r m o s to f t h es e LLCs . Each LLC g ran t eda co n s erv at i o n eas em en tt o GLT. Th e IRS h as ch al l en g edthe ch ari tab l e co n tri b u ti o n d edu ct i o n s cl ai m edb y

the LLCs fo r t h o s e o th er d o n at io n s . See En g l ewo o d Pl ace, LLC v
. Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -1 0 5 ; M ap l e Lan d i n g, LLC v . Co m m i s si o n er, T.C. M em o . 2 02 0 -1 0 4 ; Ri v ers id e Pl ace, LLC v . Co m m i s si on er, T.C. M em o . 2 0 2 0 -1 0 3 ; Vi l lag e atEffi n g h am , LLC v . Co m m is s i o n er, T.C. M em o . 2 0 2 0-1 0 2 ; Oakhi l l W o o d s , LLC v . Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -2 4 ; Co t t o nwo o dPl ace, LLC v . Co m

m i s s i o n er, T.C. Dkt . No . 1 4 0 7 6-1 7 ; Red OakEs t at es , LLC v . Co m m i s s i o n er, T.C. Dkt . No . 1 3 6 5 9-1 7
.- 5
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[* 5 ] p o s es , an d th e co n s tru ct i o n o f res id en t i al dri v eway s an d u t i l it i es (i n cl u d i n g wat er, s ep t i c, an d p o wer l i n es ) t o s erv e a p ai r o f ad j acen ttwo -acre res i d en ti al p arcel s o wn edb y

Bel ai r. Th e d eedreco gn i zes the p o s s i b i li ty th atth e eas em en tm i g h tb e ex t i n g u i s h ed ats o m e fu tu re d at e. In th e ev en tth e p ro p erty were s ol dfo l l o wi n g ju d i ci al ex t i n g u i s h m en to f the eas em en t , p arag rap h 1 7 p ro v i d edth at“ [t ] h e am o u n to f t h e p ro ceed s t o wh i ch Gran t ee s h al l b e en t i t l ed , aft er th e s at i s fact i on o f an y an dal l p ri o r cl ai m s , s h al l b e d et erm i n ed , u n l es s o therwi s e p ro v i d edb y Geo rg i a l aw atth e t i m e, i n acco rd an ce wi th t h e Pro ceed s p arag rap h .” Parag rap h 1 9 , cap t i o n ed“ Pro ceed s ,”
s p eci fi edth atth e d eedg ran t edth e Co n s erv an cy “ a real p ro p ert y

i n t eres t , i m

m ed i
at el y v es tedi n Gran t ee,” an d th atth i s v es t edp ro pert y i n teres ten t i t l edth e Co n s erv an cy

t o recei ve, i n th e ev en to f an ex t i ng u i s h m en t , a s h are o f an y fu tu re p ro ceed s d et erm i n ed b y m u l t ip ly i n g th e fai r m ark etv al u e o f t h e Pro p ert y u nen cu m b eredb y th i s Co n s erv at i o n Eas em en t(m in u s an y i n creas e i n v al u e aft er t h e d at e o f th is Co n s erv at i o n Eas em en tat tri b u t ab l e t o i m p ro v em en t s) b y th e rat i o o f t h e v al u e o f t h e Co n s erv at i o n Eas em en tatthe t i m e o f t h i s co n v ey an ce t o t h e v al u e o f t h e Pro p ert y atth e t i m e o f t h i s co n v ey an ce wi th ou td edu ct i o n fo r t h e v al u e o f t he Co n s erv at i o n Eas em en t . Bel ai r t i m el y

fi l edFo rm

1 0 6 5 , U.S. Retu rn o f Part n ers h i p In co m e, fo r i t s t ax ab l e y ear b eg i n n i ng No v em b er 1 1 an d en di n g Decem b er 3 1 , 2 0 0 9 . Onth at- 6
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[* 6 ] retu rn i t cl ai m eda ch ari t ab l e co n tri b u t i o n d edu ct i on o f $ 4,7 7 8 ,0 0 0 fo r i t s d o n at i o n o f t h e eas em en t . Bel ai r rel i edo n an ap p rai s al b y Dav i dR. Ro b ert s , wh o
u s ed th e “ b efo re an d aft er m et ho d ” t o d et erm i n e t h e eas em en t ’ s fai r m ark etv al u e (FM V). 4 Th e IRS s el ect edBel ai r’ s 2 0 0 9 retu rn fo r ex am i nat i o n . On J un e 1 9, 2 0 1 7 , th e IRS i s s uedBel ai r a t i m el y n o t i ce o f fi n al p art ners h i p ad m in i s trat i v e ad ju s t m en t (FPAA) d i s al l o wi n g t h e ch ari t ab l e co n tri b u t i o n d edu ct i on i n fu l l b ecau s e Bel ai r h ad n o ts h own th atth e req u i rem en t s o f s ect i on 1 7 0 were m et . Th e FPAA al t ern at i vel y d et erm i n edth at , i f an y

d edu ct i o n were al l o wab l e, Bel ai r h adn o t es t ab l i s h ed th atth e FM V o f t he eas em en tex ceed edzero . Th e FPAA d et erm i n eda 4 0% “ g ro s s
v al u at i o n m i s s t at em en t ” p en al ty u n d er s ect i o n 6 6 6 2 (h ) an d(i n th e al t ern at i v e) a 2 0 % accu racy -rel at edp en al ty u n d er o th er p ro v is i on s o f s ect i o n 6 6 62 (a). Pet i t i o ner t i m el y

p et it i o n edth i s Co u rtfo r read ju s t m en to f t h e p art n ers h i p i t em s . See s ec. 6 2 2 6 (f). On Oct o b er 1 1 , 2 0 1 8 , res p o n d en tfi l eda m o ti o n fo r p ar4 M r. Ro b ert s ’ ap p rai s al s t at es th at th e 1 4 5 -acre t ractwas p arto f a l arg er 1 ,4 47 -acre t ract acq u i redb y HRH i n Au g u s t2 0 07 fo r $ 3 ,8 1 8 ,2 0 0 , o r $ 2 ,6 3 9 p er acre. As s u m i n g thatt o b e t ru e, M r. Ro b ert s ’ v al u at io n s up p o s edth at th e Pro p ert y h ad ap p reci at edi n v al u e b y n earl y 1 ,3 0 0 % du ri n g the Great Reces s i o n . M r. Ro b ert s was th e o ri g in al ap p rai s er i n m an y o th er co n s erv at i o n eas em en tcas es th at th i s Co u rth as d eci d ed . See, e.g ., Pl at eau Ho l d i n g s , LLC v
. Co m m i s s i o ner, T.C. M em o. 2 0 2 0 -9 3 ; W o o dl an dPro p . Ho l d i n gs , LLC v . Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -5 5 ; Oakh i l l W o o d s , LLC v . Co m m i s s i o n er, T.C. M em o. 2 0 2 0 -2 4
.- 7
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[* 7 ] t i al s u m

m ary ju d gm en tad dres sedt o th e “ ju d i ci al ex t i n gu i s hm en t ” i s s u e. Pet i t io n er t i m el y

res p o n d edt o th atm ot i on .

Di s cu ss i o n A. Su m

m ary J u dg m en tSt an d ard Th e p u rp os e o f s u m

m ary ju d g m en t i s t o ex p ed it e l i t i g at i o n an d av o i dco st l y , u n n eces sary , an dt i m e-co n s u m in g tri al s . See FPL Grp ., In c. & Sub s . v . Co m m i s s i on er, 1 1 6 T.C. 7 3 , 7 4 (2 0 0 1). W e m ay g ran tp art i al s u m

m ary ju dg m en treg ard
i n g an is s u e as t o wh ich there i s n o g en u i n e d is p u t e o f m at eri al fact an da d eci s i o n
m ay b e ren d eredas a m at ter o f l aw. Ru l e 1 2 1 (b ); El ec. Art s , In c. v . Co m m i s s i o n er, 1 1 8 T.C. 2 2 6 , 2 3 8 (2 0 02 ). Pet i t i o n er h as al leg edn o g en u i n e d i s p u t e o f m at eri
al factaffect i n g t h e qu es t i o n th atres p o nd en th as p ro po s edfo r s u m m ary ad ju d i cat i on . W e co n cl u d e t h atth i s qu es t i o n m ay ap pro p ri at el y b e ad

ju d i cat eds u m

m ari l y . B. J u d i ci al Ex ti n g u i sh m en t Th e Co d e g en eral l y

res tri ct s a t ax pay er’ s ch ari t ab le co nt ri b u ti o n d edu ct i o n fo r t h e d o n at io n o f “ an i n t eres ti n p ro p ert y wh i ch co n s i s t s o f l es s th an th e t ax p ay er’ s en t i re i n t eres ti n s uch p ro p ert y .” Sec. 1 7 0 (f)(3 )(A). Bu t th ere i s an ex cep t i on fo r a “ qu al i fi edco n serv at io n co n tri b u t io n .” Sec. 1 70 (f)(3 )(B)(i ii ), (h )(1 ). Fo r t h e d o n at i o n o f an eas em en tt o b e a “ qu al ifi edco n s erv at i o n co n tri b ut i o n ,” t h e co n s erv at i o n p u rp o s e m

u s tb e “ p ro t ect edi n p erp etui ty .” Sec. 1 7 0 (h )(5 )(A).- 8
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[* 8 ] Th e reg u l at i o n s s etfo rt h d et ai l edru l es fo r d et erm i n i n g wh et h er t h i s “p ro t ect edi n p erp etu i ty ” req u i rem en ti s m et . Of i m p o rt an ce h ere are t h e ru l es g o v ern i n g th e m an dat o ry

d i v i s i on o f p ro ceed s i n t he ev en tth e p ro pert y i s s ol dfo l l o wi n g a ju d i ci al ex t i ng u i s h m en t o f t h e eas em en t . See s ec. 1 .1 7 0 A-1 4 (g )(6 ), In co m e Tax Reg s. Th e reg ul at i o ns reco g n i ze t h at“ a s ub s equ en tu n ex p ect edch an g e i n th e co n d i t i o ns s u rro u nd i n g the p ro p erty th ati s th e s ub

jecto f a d o n at i o n * * * can m ak e i m p o s s ib l e o r i m

p ract i cal th e co n t i n u edu s e o f t h e p ro p ert y fo r co ns erv at i o n p u rp o s es .” Id . s ub d i v . (i ). Des p i te t h at p o s s i b i l i ty , “ the co n serv at i on p u rp o s e can
n o n et h el es s b e t reat ed as p ro t ect edi n p erp etu i ty i f t h e res tri ct io n s are ex t i n g u i s h ed b y ju d i ci al p ro ceed i n g ” an dth e eas em en t d eeden s u res th at th e ch ari t ab l e d o n ee, fo l l o w i n g s al e o f th e p ro p erty , wi l l recei v e a p ro p ort i o n at e s h are o f t h e p ro ceed s
an d u s e th o s e p ro ceed s co n s i s t en t l y wi th th e co n s erv at i o n p u rp o s es u n d erl y i n g th e
o ri g i nal g i ft . Ib i d . Ineffect , the “ p erp etu it y ” req u i rem en ti s d eem eds at i s fi edb ecau s e t h e s al e p ro ceed s rep l ace t h e eas em en tas an as s etd ep l oy edb y th e d o n ee

“ ex cl u s i v el y

fo r co n s erv at i on p u rp o s es . ” Sec. 1 70 (h )(5 )(A). Th e ju d i ci al ex t i n g u i s h m en t p ro v is io n s o f t h e d eedi n th i s cas e are s ub s t an t i al l y s i m i l ar t o t h o se t h atwe co n s i dered i n Co al Pro p . Ho l d i n g s , 1 5 3 T.C. at1 3 0
- 1 3 1 . Fo l l o wi n g o u r reas o n i n g i n thatcas e, we co ncl u d e t h atBel ai r’ s d eedfai l s t o
s at i s fy th e “ p ro tect edi n p erp etui t y ” req ui rem en tfo r t wo reas o ns .- 9
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[* 9 ] Fi rs t , th e reg u l at o ry fract i o n u s edi n th e d eedt o d et erm i n e t h e g ran t ee’ s p ro p ort i o n at e s h are o f p o s t -ex t i n g u i s h m en tp ro ceed s i s ap p l i ed , n ott o t h e fu l l s al e p ro ceed s--an am o u n tp res u m ab l y equ i val en tt o t h e FM V o f t h e p ro p ert y atth e t i m e o f s al e--b utt o th e p ro ceed s “ m i n u s an y i n creas e i n v al u e aft er t he d at e o f t h i s Co n s erv at i o n Eas em en tat tri b u t ab le t o i m p ro vem en t s .” Th u s , th e g ran t ee’ s s h are i s i m p ro p erl y redu cedo n acco un to f (i ) ap p reci at i on i n the v al u e o f i m p ro v em en t s
ex i s t in g wh en th e eas em en twas g ran t edp l u s (i i) t h e FM V o f an y i m p ro v em en t s th atth e d o n o r o r i t s s u cces s o rs s ub s equ en t l y m ak e t o the p ro pert y . By reduci n g th e g ran t ee’ s s hare i n th i s way , th e d eedv i o l at es th e reg u l at o ry req u i rem en tth at th e d o nee recei v e, i n the ev en tth e p ro p ert y i s s o l d fo l l owi n g ex t i n gu i s h m en to f th e eas em en t , a s h are o f p ro ceed s th ati s “ atl eas tequ al t o th e p ro p o rt i o n at e v al u e th atth e p erp etu al co ns erv at i o n res tri ct i o n atth e t i m e o f th e g ift , b ears t o t h e v al u e
o f t h e p ro p ert y

as a wh o l e atth att i m e.” See s ec. 1 .1 7 0A-1 4 (g )(6 )(i i ), In co m e Tax Reg s. As we h av e n o t edp rev i o u s l y , th e req u irem en t s o f th is reg u l at i o n “ are s tri ct l y co n s tru ed
. ” Carro ll , 1 4 6 T.C. at2 1 2 . Becau s e th e g ran tee i n th i s cas e “ i s n o t ab s o lu t el y

en t i t l edt o a p ro p o rt i o n at e s h are o f * * * [t h e] p ro ceed s ” up o n a p o s t ex t i n g u i s h m en ts al e o f t he Pro p ert y , th e co n s erv at i o n p u rp o s e u nd erl y i n g th e co n tri b u ti o n i s n ot“p ro t ect edi n p erp etu i ty .” Co al Pro p . Ho l d in g s , LLC, 1 5 3 T.C.- 1 0 -

[* 1 0 ] at1 2 7 , 1 3 9; acco rd , Pl at eauHo l d in g s , LLC v
. Co m m i s s i o ner, T.C. M em o . 2 0 2 0 -9 3 , at* 2 3; Oak

b ro o k Lan dHo l d i n g s , LLC v . Co m m i ss i o n er, T.C. M em o . 2 0 2 0 -5 4 . Th e U.S. Co u rto f Ap p eal s fo r th e Fi ft h Ci rcu i th as l i k ewi s e s u s t ai n ed th e d i s al l o wan ce o f a ch ari tab l e co n tri b u t i o n d educt i o n wh ere t h e ju d ici al
ex t i n g u i s h m en tp ro v i s i o n o f an eas em en td eedi n cl ud ed a carv e-o u t fo r d o n o r i m p ro v em en t s s im i l ar t o th ath ere. See PBBM -Ro s e Hi l l , 9 0 0 F.3 dat2 0 8. Th e eas em en td eedh ere h as a s eco n dp ro b l em , wh i ch was al s o p res en ti n Co al Pro p. Ho l d i n g s . Th e g ran t ee’ s t en t at i v e s h are o f th e p ro ceed s, as d et erm i n ed
u n d er p arag rap h 1 9 o f t h e d eed , i s ad j u s t edfu rt h er b y

p arag rap h 1 7. Itp ro v i d es th atth e g ran t ee’ s s hare wi l l b e d et erm i n edu n d er t h e Pro ceed s p arag rap h , b u to n l y

“ aft er t h e s at i s fact i o n o f an y an dal l p ri o r cl ai m s . ” Pri or cl ai m s ag ai n s tth e s al e p ro ceed s m i g h tb e h el db y v ari o u s cred i to rs o f Bel ai r o r i t s s u cces s o rs . It is n o tn eces s ari l y

u n reas o n ab l e fo r a d eedt o p ro v i d e t hatp ri o r cl ai m s m ay b e p ai dfro m

s al e p ro ceed s . Wh ati s u nreas on ab l e i s th e req u i rem en t th atal l p ri o r cl ai m s b e p ai do uto f t he g ran t ee’ s s h are o f t h e p ro ceed s , ev en i f t h os e cl ai m s rep res en tl i ab i l i t i es o f Bel ai r o r i t s s u cces s ors . See Co al Pro p . Ho l d i n g s, LLC, 1 5 3 T.C. at1 4 5 n . 5 . Becau s e t h e g ran tee’ s s h are o f t he p ro ceed s i s i m p ro p erl y redu ced b y carv e-o u t s b o th fo r d on o r i m p ro v em en t s an dfo r cl ai m s ag ai n s t the d o n o r, th e- 1 1 -

[* 1 1 ] d eed ’ s ju d i ci al ex t i n g u i s h m en t p ro v i s i o n s d o n o ts at i sfy th e reg u l at ory req u i rem en t s . If t h e reg u l at i on i s i n t erp ret ed , as we h av e i n t erp ret edi t , t o m ak e Bel ai r i n el i g i b l e fo r a ch ari tab l e co n tri b u t i o n d edu ct i o n , Bel ai r co n t en d s th atth e reg u l at i on i s i n val i d . Itu rg es th ats ect i on 1 .1 7 0 A -1 4 (g )(6 ), In co m e Tax Reg s . , i s an

“ arb i traryan d cap ri ci o u s” ru le p ro m u l g at edi n v i ol at i o n o f t h e Ad m i n i s trat i v e Pro cedure Act . An di t co n ten d s thatth e reg ul at i o n i s s ub s tan t i v el y i n v al i du n d er th e t es t s etfo rt h i n Ch ev ro n , U.S.A., In c. v . Nat . Res . Def. Co u n ci l, In c., 4 6 7 U.S. 8 3 7 (1 98 4 ). W e co m

p reh en s i v el y

ad dres s edan d reject edb ot h o f th es e arg u m en t s i n a recen tCo u rt -rev i ewedOp i n i o n . See Oakb ro o kLan dHo l d i ng s , LLC v . Co m m i s s i o n er, 1 5 4 T.C. at_

_ (s l i p o p . at1 5 -3 3 ). W e n eedn o trep eatth atan al y s i s h ere. 5

5 Pet i t i on er d raws o u r at ten t i o n t o Pri v. Ltr. Ru l
. 2 0 0 8 3 6 01 4 (Sep t . 5 , 2 0 0 8 ) (PLR), i n wh i ch th e IRS fo un du n o b ject io n ab l e an eas em en td eedwi th a ju d i ci al ex t i n g u i s h m en tcl au s e res em b li n g th ath ere. Pet i t i o ner co n t en d s th atres p o n d en t ’ s i n t erp ret at io n o f t h e reg ul at i o n as s etfo rt h i n th atPLR i s b in d i n g o n res p o n d en t u n d er Au er v . Ro bb i n s , 5 1 9 U.S. 4 5 2 , 4 6 1 (1 9 9 7 ). Pet i t i o n er’ s arg u m en ti g n o res th e fact th atd et erm in at i o ns em b o d i edi n a PLR “ m ay

n o tb e u sedo r ci t edas p reced en t.” Sec. 6 1 1 0(k )(3 ). Th e t ax p ay er i n PBBM -Ro s e Hi l l b ro ug h t th e s am e PLR t o the Co u rto f Ap p eal s ’ at t en t i o n , b u tth atco u rtp ai dn o h eedt o i t , fi n d in g t h e reg u l at i o n u n am

b i g u ou s o n i t s face. See PBBM -Ro s e Hi l l , Lt d . v . Co m m i s s i o n er, 9 0 0 F.3 d1 9 3, 2 0 7 -2 08 (5 th Ci r. 2 0 1 8 ). W e h av e d o n e t h e s am e. See Co al Pro p . Ho l di n g s , 1 5 3 T.C. at1 4 4 ; Hewi t t v . Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -8 9 , at* 2 0
- * 2 1 (co n cl u di n g th atth e PLR “ i s n ei th er p ers uas i v e n o r rel ev an t”).- 1 2 -

[* 1 2 ] C. Pet i t i o ner’ s Ad d i t i o n al Arg u m en t s 1
. Es t o pp el Pet i t i o ner co n ten d s th atju d i ci al es t o pp el s h o u l dp rev en tth e IRS fro m d i s al
l o wi n g Bel ai r’ s d edu ct i o n b ecau s e, i n an u n rel at edcas e, t h e Go v ern m en ts t i p u lat
edth ata d eedwi th an an al og o u s ex t i n g u i s h m en t cl au s e s at i sfi edth e reg u l at i o n s . Pet i t io n er d i rect s o ur at t en t io n t o DM B Real co LLC v . Un i t edSt at es , Ci v i l No . 1 6 -1 5 8 5 -NVW

(D. Ari z. fi l edM ay

2 3 , 2 0 16 ), wh ere t he IRS h add is al l o weda $ 2 6 .4 4 m i l l i o n ch ari t ab l e co n tri b u t i o n d edu ct i on fo r a co n s erv at i o n eas em en t . Th e p art i es fi l ed a “

jo i n ts t i p u lat i o n o f fact s fo r p u rp os es o f s u m m ary ju d g m en t” i n wh i ch th ey

s t i p u l at edth atth e eas em en td eed , o ri g i n al l y co n v ey edi n 2 0 0 6 , s at i s fi edthe “ ju d i ci al ex t i n gu i s h m en t ” reg u l at i o n aft er t h e d eedwas am en d edi n 2 0 1 2
. Th e Go v ern m en tco n cu rren t l y fi l eda m o t i o n fo r s u m

m ary ju d g m en tco n t en d i n g th atth e o ri g i n al , u n am en d ed d eedco n tro l l ed as t o wh et h er t h e t ax p ay er was en t i
t l edt o a d educt i o n. Befo re t h e co urtco ul d h ear arg u m en t o n t h atm o t i o n , th e p art i es reach eda s et t l em en tth atal l o wedth e t ax p ay er a d edu ct i o n o f $ 6.6 1 m i l l i o n . J u d i ci al es t o p p el ap p l i es i n th e Tax Co u rt . See Hu d d l es to n v . Co m m i s s i o ner, 1 0 0 T.C. 1 7 , 2 8 (1 9 9 3 ). Gen eral l y , three n o n -ex h au s ti v e fact o rs g ui d e o u r
an al y s i s wh en as k edt o i n v ok e t h i s d o ct ri n e. W e co n si d er wh et h er: (1 ) “ a p art y ’ s l at er p os i t i o n * * * [i s ] ‘ cl earl y i n co n s i s t en t’ wi th i t s earl ier p os i t i o n ,” (2 ) “ th e- 1 3 -

[* 1 3 ] p art y

h as s u cceed edi n p ers uad i n g a co u rtt o accep tthatp art y ’ s earl ier p o s i t i on ,” an d(3 ) “ th e p art y s eek i n g t o as sertan i n co n s is t en tp o si t io n wo u l d d eri v e an u n fai r ad van t ag e.” New Ham ps h ire v . M ai n e, 5 3 2 U.S. 7 42 , 7 50 -7 5 1 (2 0 0 1). Wh ere (as h ere) a p art y s eek s t o i n v o k e ju d i ci al es t o p pel o n th e b as i s o f a p ri o r p ro ceed i n g t o wh i ch i twas n o ta p art y , th e Co u rto f Ap peal s fo r t h e El ev en t h Ci rcu i t --t o wh ich an ap p eal o f t h i s cas e wo u ldap p ear t o l i e--i n s tru ct s tri al co u rt s t o ap p ly a s tri ct er, two -fact o r t es t . Th att es tas ks wh et her: “ (1 ) th e p arty t o o kan i n co n s i s t en tp os i ti o n u n der o at h i n a s ep arat e p ro ceed i n g , an d(2 ) t h e i n co n s i s t en t p o s i t i on s were ‘ cal cu l at edt o m ak e a m o ck ery o f t h e ju di ci al s y s tem . ’ ” Sl at er v . U.S. St eel Co rp ., 8 7 1 F.3 d 11 7 4 , 1 1 81 (1 1 th Ci r. 2 0 1 7) (q uo t i n g Bu rn es v . Pem co Aero p l ex , In c., 2 9 1 F.3 d1 2 8 2 , 1 2 8 5 (1 1 th Ci r. 2 0 0 2 )). No n e o f t h es e co n d i t io n s i s m eth ere. Th e Go v ern m en t ’ s “ earl i er p o s i t i o n ”
was s im pl y a co n ces s i o n , an di tev id en t l y m ad e t h atco n ces si o n fo r th e p urp o s e o f faci li t at i n g s u m

m ary ju d g m en t o n an o th er th eo ry th at i td eem ed m eri t o ri o u s . Part i es t o l i t ig at i o n m ak e co n ces s i o n s fo r al l s o rt s o f reas o n s u n rel at ed t o t h e u n d erl y i n g m eri t s , an dth e Go v ern m en t ’ s act i o n i n th e Ari zo n a cas e was n o t“ cl earl y i n co n si s t en t ” wi th res p o nd en t ’ s cu rren t p o s i ti o n. Ib i d . (qu o t i ng New Ham p s h i re, 5 3 2 U.S. at7 50 -7 5 1 ). No r d i d t h e Go v ern m en t“p ers uad [e] a co u rt t o accep t* * * [i ts ] earl i er p o s i ti o n .” Ib id
. Becau s e t h e Go v ern m en tm ad e a t act i cal s t i p u l at i o n- 1 4 -

[* 1 4 ] an d u l t im at el y s et t l edth e cas e, t h e Di s tri ctCo u rt h adn o o ccas i o n ei th er t o accep to r t o rejectth e Go vern m en t ’ s p o s i t i o n . See Kap l anv . Co m m is s i o n er, 7 9 5 F.3 d8 0 8 , 8 1 3 (8 th Ci r. 2 0 1 5 ), aff’ g T.C. M em o . 2 01 4 -4 3. Fi n al l y , p et i ti o n er h as
n o ts h o wnh o w th e Go v ern m en t ’ s co n ces si on i n th e earl i er cas e wo u l dal l o w i tt o d eri v e “ an u n fai r ad v an t ag e,” s ee New Ham p s h i re, 5 3 2 U.S. at7 5 1 , m u ch l es s th at i t w as “ cal cu l at ed t o m ak e a m o ck ery o f t h e ju d i ci al s y st em ,” s ee Sl at er, 8 71 F.3 d at1 1 8 1; Sm i th Lak e, LLC v . Co m m is s i o n er, T.C. M em o . 2 0 2 0-1 0 7
. 2
. Sup p o sed Irrel ev an ce o f Im p ro v em en t s Th e reg u l at i o n req u i res th atth e g ran t ee m u s tb e en t i tl ed t o a p ro p ort i o n at e
s h are o f p ro ceed s fro m

a s ub seq u en ts al e, ex ch an g e, o r i n vo l u n t ary co nv ers i o n “ o f th e s ub jectp ro p erty .” Sec. 1 .1 7 0 A-1 4 (g )(6 )(i i ), In co m e Tax Reg s . Th e “ s ub ject p ro p erty ” m ean s “ th e p ro p ert y th ati s t h e s ub

j ecto f a d o n at i o n u n d er t h i s p arag rap h ,” as t o wh i ch th e s u rro u n d i n g co n d i t i o n s h av e u n ex p ect ed l y ch an ged . Id
. s ub d iv . (i ). Pet i t i o n er u rg es th atth e reg u l at i o n d o es n o treq u i re t h e g ran t ee t o recei v e an y

p ro ceed s at tri b u t ab l e t o i m p ro v em en ts b ecau s e i m

p ro vem en t s are n o t p arto f “ th e p ro p ert y th at is th e s ubjecto f a d o nat i o n u n d er th i s p arag rap h .” Ib i d
. Rat h er, p et i t i o n er co n t en d s th atth e “ p ro p ert y th ati s th e s ub

jecto f [the] d o n at i o n ” i s s im p l y “ th e u n d erl y i n g l an d .”- 1 5 -

[* 1 5 ] W e d i s ag ree. Th e d o n at i o n o f a co n s erv at i o n eas em en tg i v es ri s e t o a d edu ct i o n o n l y

i f i ti m p o s es “ a res tri ct i o n (g ran t edi n p erp etu i ty ) o n th e u s e wh i ch
m ay b e m ad e o f t h e real p ro p ert y .” Sec. 1 7 0 (h )(2 )(C). Th e “ d on at i on u n d er t h i s p arag rap h ” t hu s co n s i s t s o f t h e u s e res tri ct io n s thatare i m p o s edi n p erp etui ty

b y th e eas em en t d eed . See s ec. 1 .1 7 0 A-1 4 (g )(6 )(i ), In co m e Tax Reg s. Th e res tri ct i on s i m p o s edb y th e eas em en td eedn eces sari l y ap p l y , n o to n l y

t o th e l an d , b u t al s o t o an y

i m pro v em en t s m ad e b y

th e g ran t o r p u rs uan tt o i t s res erv edri g h t s . Here, t h e d eedres erv es t o Bel ai r t h e ri gh t t o co n du ctfo res try an dag ri cu l
tu ral act i v i t i es , b u ti tres tri ct s th e s cal e o f t ho s e act i v it i es an d t h e m an n er i n wh i ch th ey m ay b e p erfo rm ed . Para. 4 (a) an d(b ). Th e d eedres erv es t o Bel ai r t h e ri g h t t o “ co n s tru ct a l im i tedn um b er o f n ew i m

p ro v em en t s , ” b u tres tri ct s th atri g h ti n
v ari o u s way s . Th e d eeds p eci fi es th e p erm is s i b l e l o cat i o n o f res i d en t i al dri v eway s
an d u t il i ty

l i n es , i n cl u d i n g wat er, s ep t i c, an d p o wer l i n es . Para. 4 (e)(i ). Ut i l i ty l i nes m u s tb e b u ri edi f p o s s i b l e “ s o as t o m i n i m i ze i nt erferen ce wi th th e s cen i c
n atu re” o f t h e co n s erv edarea. Ib i d . Th e i n s t al l at i o n o f an y i rri g at i o n s y s t em

m u s t
n o t“ i nt erfere wi th t h e Co n serv at i o n Val u es p ro t ect ed h erei n .” Para. 4 (e)(i i ).

“ Ut i l i ty an d d ri vewayp lacem en tan dan y co n s tru ct i o n p erfo rm ed s hal l b e d o n e i n
s u ch a m an n er as t o m i n i m i ze d am ag e t o th e en v i ro n m en t an dth e Co n s erv at i o n Val u es . ” Para. 4 (e)(i i i ). “ Ro ad s , th e d ri v eway an du ti l it i es s hal l n o tb e p l aced i n- 1 6 -

[* 1 6 ] l o cat i o n s wh ich s i g n ifi can t l y i n t erfere wi th th e Co n serv at i o n Val u es . ” Ib i d
. An y p o n d s co n s tru ct edm ay

n o tex ceed fo u r acres i n t o t o , m ay n o t “ im p actth e
eco l o g i cal i n t eg ri ty

o f an y wet lan d s [o r] creek ,” an dare co n d it i on edo n th e Co n s erv an cy ’ s ap p ro v al as t o l o cat io n . Para. 4 (f). In s h o rt , th e d eed ’ s res tri ct i o n s are i m p o s edo n t h e en t i ret y

o f t h e co n s erv ed area--b ot h th e l an dan dan y i m p ro vem en t s Bel ai r m ak es t o i t . Th e “ pro p erty th ati s th e s ub jecto f * * * [t h e] d o n at i o n ” t h u s i n cl u d es b o th th e l an dan di t s i m p ro v em en t s . Sec. 1
. 1 7 0 A-1 4 (g )(6 )(i ), In co m e Tax Reg s .; s ee Hewi t tv . Co m m i s s i o n er, T.C. M em o . 2 02 0 -8 9 , at* 1 8 (“ Th e s ub jectp ro p ert y

refers t o th e p ro p ert y

th ati s
s o l dth atg en erat es th e p ro ceed s aft er t he eas em en ti s ex t i n g u i s h ed .”). Th e p ro ceed s th atth e Co n serv an cy m u s trecei v e upo n a p o s t -ex ti n g u i sh m en t s al e o f t h e
s ub jectp ro p erty

thu s i n cl u d e t h e Co n s erv an cy ’ s p ro p ort i on at e s h are o f p ro ceed s at tri b u t ab l e t o i m

pro v em en t s . 6

6 Th i s co n cl us i o n i s co ns i s t en t wi th a co m m on s en s e u nd ers t an d i n g o f t h e reg u l at o ry

l an g u ag e referri n g t o p ro ceed s fro m s al e “ o f t h e s ub

j ectp ro p ert y .” Sec. 1 .1 70 A-1 4 (g )(6 )(i i ), In co m e Tax Reg s . Own ers o f real es t at e d o n o tty p i cal l y s el l ro ad s , dri v eway s , p o n d s , o r b u ri edu t i l i ty l i n es s ep arat el y

fro m th e real es t at e o n wh i ch th o s e i m

p ro v em en ts are s i tu at ed . If th e p ro pert y i s s o l d , th e s al e p ro ceed s are n eces s ari ly

at tri b ut ab l e b o th t o the l an dan dt o the at tach edi m p ro v em en t s .- 1 7 -

[* 1 7 ] 3
. Sup p o sed W ort hl es s n es s o f Im p ro v em en ts Pet i t i o ner n ex t as s ert s th atan y fu tu re i m p ro vem en t s wo u l d n otm ean i n g fu l l y i n creas e t h e v al u e o f t h e s ubjectp ro p ert y . Fo r t hatreas o n , p et i t i o n er co n t en d s th at th e d eed ’ s carv e-o u t fo r d o n o r i m p ro vem en ts wo u l d n o tcau s e t h e Co n s erv an cy t o recei v e l es s th an i t s fu l l p ro p o rt i o n at e s h are o f p o s t -ex ti n g ui s h m en tp ro ceed s . In
es s en ce, p et i t i o n er u rg es thatthi s i s a cas e o f “ n o h arm , n o fo u l .” Ag ai n we d is ag ree. To st art , p et i t i o n er’ s co n t en t i o n res t s u n eas i l y wi th th e t erm s o f t h e d eed . Parag rap h 4 (a) res erv es t o Bel ai r t he ri gh tt o “ co n s tru cta l i m i t edn u m b er o f n ew i m

p ro v em en t s ” an den u m erat es th e ty p es o f i m p ro v em en t s th at Bel ai r m ay

m ak e. Parag rap h 1 9 ex p l i ci t l y s ub tract s fro m

the s al e p ro ceed s , an d
res erv es t o Bel ai r, “ an y

i n creas e i n v al ue aft er t h e d at e o f t h i s Co n s erv at i o n Eas em en tat tri b u t ab l e t o i m

p ro v em en t s . ” It i s h ardt o u n ders t an d wh y th e d raft s p ers on
wo u l dh av e i n cl ud edth i s l an gu ag e i f Bel ai r h adb el i ev ed th ati t s an t i ci pat edi m p ro v em en t s wo u l dn o ten h an ce t h e p ro p ert y ’ s v al u e. An di ts eem s en t irel y p l au s i
b l e t h atth ey

wo u l d d o s o : Ro ad s , dri v eway s , i rri g at i o n s y s t em s , wat er p i pes , el ectri c cab l es , an ds ep ti c s y s t em s h av e v al u e i n tri n s i cal l y an das fu rn i s hi n g es s en t i al
s erv i ces t o Bel ai r’ s ad

jo i n i n g res i d en t i al p arcel s . Dedu ct i o n s are a m at t er o f l eg i s l at i v e g race, an da t ax p ay er m u s tp ro v e i t s
en t i t l em en tt o th e d edu ct io ns i tcl ai m s . INDOPCO, In c. v . Co m m i s s i o n er, 5 0 3- 1 8 -

[* 1 8 ] U.S. 7 9 , 8 4 (1 9 9 2 ). To b e en t i t l edt o a d edu ct i o n fo r t h e d o n at i o n o f a
co n serv at i on eas em en t , th e d o n o r m u s ten s u re t h atth e d on at i o n “ g i ves ri se t o a p ro p erty ri g h t , i m m ed i at el y v es t edi n t he d o n ee o rg an i zat i o n ,” t o recei v e a p ro p ort i o n at e s h are o f t h e p ro ceed s o f an y p o st -ex t in g u i s h m en ts al e. Sec. 1 .1 7 0 A1 4 (g )(6 )(i i ), In co m e Tax Reg s . Th e d eedh ere d o es n o tm eetth i s t es tb ecau s e i t
res erv es t o Bel ai r t he ri g h tt o m ak e “ i m p ro v em en t s ” o f o bv i o u s v al ue an dt o ret ai n al l p ro ceed s at tri b u t ab le t o th o s e i m pro v em en t s . 7 4
. Geo rg i a Law Th e reg u l at i o n en t i t l es the g ran t ee t o a p ro p ort i on at e s h are o f p o s t -ex t i n g u i s h m en tp ro ceed s “ un les s s t at e l aw p ro v i des th atth e d on o r i s en t it l edt o th e fu l l p ro ceed s fro m

th e co n v ers i o n wi th o u treg ardt o the t erm s o f th e p ri or p erp etu al
co n serv at i on res tri ct i o n . ” Ib id . Pet i t i o n er co n t en d s th atGeo rg i a l aw (t he l aw ap p l i cab l e h ere) wo u l dp recl u d e t h e Co n s erv an cy fro m recei v i ng an y

p ro ceed s i n a
co n demn at i o n p ro ceed i n g i n v o l v i n g th e p ro p ert y . Acco rd in g t o p et i t io n er, a co n7 Ci t i n g Th o rn t o n v . Dep ’ to f Tran s p ., 6 2 0 S.E.2 d6 2 1, 6 2 4 (Ga. Ct . Ap p . 2 0 0 5 ), p et i t i o n er u rg es th at“ th e co s tt o b u i l da dri v eway o n a p ro p erty d o es n o t refl ectth e p ro pert y ’ s fai r m ark etv al u e.” Iti s tru e t hatm o n ey s p en tt o i m

p ro v e p ro p erty d o es n o tn eces s ari l y

p ro du ce a d o l lar-fo r-d ol l ar i n creas e i n th e FM V o f th e p ro p ert y . Bu ti t d o es n o tfo l l o w th ata co m b i n at i o n o f ro ad s , dri v eway s , i rri g at i o n s y st em s , wat er p i pes , el ect ri c cab l es , an d s ep t i c s y s t em s wo u l dh av e n o effect o n th e FM V o f the co n s erv edarea. In an y ev en t , p et it i on er can o n ly s p ecu l at e ab ou tth e fu tu re v al u e o f t h e s p eci fi c i m p ro v em en t s i th as ret ai n edth e ri gh t t o m ak e b u th as n o ty etm ad e.- 1 9 -

[* 1 9 ] s erv at io n eas em en ti s n o tco m p en sab l e t o th e g ran tee i n a Geo rg ia
co n demn at i o n p ro ceed i n g . Pet i t i o ner d i rect s o ur at t en t i o n t o An d ers on v . Ly n ch , 3 S.E. 2 d8 5 (Ga. 1 9 3 9 ). Th at cas e i n v o l v edco nt i g u o u s p arcel s o f l an d , each s ub jectt o a co v en an t
res tri ct i n g i tt o res i d en t i al u s e. Th e ci ty co nd em n edo n e o f th e l o t s fo r u s e as a p ub l i c ro ad , a n o nres i d en ti al u se. Th e co u rth el dth at the o wn ers o f t h e n ei g h b o ri n g l o t s h adn o co m

p en s ab l e i n t eres t i n th e co n d em n at i o n p ro ceed i n g , reas o n i n g th atth ey h el dn o p ro p ert y i n t eres ti n th e l o t s o u g h tt o b e co nd em n ed . Id . at8 9
.

“ Th e m o s tth atcan b e s ai d ,” t h e co u rtco n cl ud ed , “ i s th atth e res tri ct i v e co ven an t s
* * * are en fo rceab l e as b et ween th e p art i es th eret o an dthei r s u cces s o rs wi th
n o t i ce. Th ey

d o n o t co n vey

an i n t eres ti n th e l an d .” Ib i d
. Pet i t i o ner’ s arg u m en ti s u npers u as i v e fo r atl eas tth ree reas o n s . Fi rs t , p et i
t i on er ci t es n o Geo rg i a au th o ri ty th atex t en ds th e p ri n ci p l es o f An d ers o n t o co n s erv at i o n eas em en t s h el d b y ch ari t ab l e o rg an i zat i o n s. W el l aft er An d ers o n was d eci d ed , Geo rg i a en act ed(wi th a few m i n o r al t erat i o ns ) t h e Un i fo rm Co ns erv at i o n Eas em en tAct
. See Ga. Co d e An n . s ecs . 4 4 -1 0 ets eq . Geo rg i a’ s p ubl i c p o l i cy
n o w ap p ears t o fav o r en fo rcem en to f co n serv at i on eas em en ts ; i n d eed , th e d eedi n th i s cas e reci t es s ev eral o f t h es e p o l i ci es . See s up ra p . 4
.- 2 0 -

[* 2 0 ] Seco n d , th e co u rt i n A nd ers o n reas o nedth atth e p l ai n t i ffs o wn edn o p ro p ert y i n t eres ti n th e l an ds o u gh tt o b e co n d em n ed . Here, b y

co n tras t, th e d eedo f
eas em en tex p l i ci t l y g ran t s th e Co n s erv an cy “ a real p ro p ert y

i n t eres t , i m

m ed i at el y
v es t edi n Gran t ee.” Para. 1 9 ; s ee s ec. 1
. 1 7 0 A-1 4 (g )(6 )(i i ), In co m e Tax Reg s . (req ui ri n g d on o r t o ag ree t h atth e eas em en t “ g i v es ri s e t o a p ro p ert y ri gh t , i m m ed i
at el y v es tedi n th e d o n ee o rg an i zat i o n ”). Geo rg i a’ s t ak i n gs cl au s e n ow m ak es co m pen s ab l e “ ev ery s peci es o f p ro p erty , real an dp ers o nal , co rp o real an di n co rp o real .” Bo wers v . Fu l t o n Ct y ., 1 4 6 S.E. 2 d8 8 4 , 8 8 9 (Ga. 1 9 6 6 ). M o reo v er, wh ereas th e p l ai nt i ffs ’ cl ai m s i n An ders o n
were s p ecu l at i v e, the d eedh ere p ro v i d es an ex p l i ci tm et ho dfo r d et erm i n i ng th e
v al u e o f t h e Co n s erv an cy ’ s real p ro p erty i n t eres t . See Pal m

Beach Ct y . v . Co v e Cl ub In v ’ rs Lt d., 7 3 4 So . 2 d 3 7 9 , 3 8 5 -3 8 7 (Fl a. 1 9 9 9 ) (d i s t i n g u i s h in g An d ers o n
an d rel at edcas es wh ere a co nd em n at i on cl ai m an th ada co n tract ual ri g h tt o co m p en sat i o n th atwas “ far fro m s p ecu l at i v e,” red u ci n g t h e ri sko f “ an en d l es s n u m b er
o f cl ai m s b as edo n u nkn o wnan di ncal cu l ab le d ep reci at i o n o f v al u e t o l an d”). Fi n al l y , as p et i t io ner reco g n izes , An d ers o n ad dres s edth e n arro w s itu at i o n wh ere p ro p ert y

was “ co n v ert edt o p ub li c u s e t h ro u g h a co n d em n at i o n . ” Th e ex t i n g u i s h m en treg u lat i o n , b y co n tras t , ap p l i es b ro ad l y wh erev er an “ u n ex pect ed ch an ge i n t h e co n di t i o n s s u rro un d i n g th e p ro pert y * * * m ak e[s ] i m

p o s si b l e o r- 2 1 -

[* 2 1 ] i m p ract i cal * * * [i t s ] co nt i n u edu s e * * * fo r co n s erv at i o n p u rp o s es .” Sec. 1 .1 70 A-1 4 (g )(6 )(i ), In co m e Tax Reg s . Ev en i f An d ers o n were t h o u g h t t o d en y th e Co n s erv an cy

an y p ro ceed s i n th e ev en to f co n d em n at io n , p et i t i o n er h as s up p l i ed
n o Geo rg i a au th o ri ty fo r t h e p ro p o s it i o n th atth e s am e res u l two u ldfo l lo w i f t h e
eas em en twere ju d i ci al l y

ex t i n gu i s h edi n o th er way s o r fo r o th er reas o n s , e.g ., b ecau s e th e p ro p erty h adb eco m e b l i g h t edo r t he co n serv at i on p u rp o se h ado th erwi s e b eco m e i m

po s s i b l e t o acco m

p l i s h
. See Carro l l , 1 4 6 T.C. at2 1 9 (reas o n i n g
s i m i l arl y reg ard in g a M ary lan dco n d em n at io n p ro v i s i o n ). Fo r al l th es e reas o n s , we h o l dth atAn ders o n d o es n o ts u ffi ce t o es t ab l is h th atGeo rg i a l aw wo u l d en t i t l e Bel ai r, fo l l owi n g a ju d i ci al ex t i n g u i s h m en to f t h e eas em en t , “ t o th e fu l l p ro ceed s fro m th e co n v ers i o n wi th o u t reg ardt o th e t erm s o f t h e * * * p erp etu al co n s erv at i on res tri ct i o n .” See s ec. 1 .1 7 0 A-1 4 (g )(6 )(i i), In co m e Tax Reg s . To i m p lem en tth e fo reg o i n g , Ano rd er wi l l b e i s s u edg ran t i n g
res p o nd en t ’ s m o t i o n fo r p art i al s u m m ary ju dg m en t .