Opinion ID: 219206
Heading Depth: 2
Heading Rank: 2

Heading: Simmons's Claim of Charitable Deductions

Text: Simmons filed tax returns for 2003 and 2004 claiming charitable deductions of, respectively, $162,500 and $93,000 for having donated the conservation easements to L'Enfant. A taxpayer generally may not take a charitable deduction for the gift of a partial interest in property. 26 U.S.C. § 170(f)(3)(A). There is an exception, however, for a qualified conservation contribution, id. § 170(f)(3)(B)(iii), defined as the contribution (A) of a qualified real property interest, (B) to a qualified organization, (C) exclusively for conservation purposes, id. § 170(h)(1). The parties agree the easements are qualified real property interest[s] and L'Enfant is a qualified organization. See id. § 170(h)(2)(C), (3). As required by the applicable Treasury regulations, see Treas. Reg. § 1.170A-13(c)(2)-(3), Simmons obtained appraisals performed by a licensed and certified appraiser, estimating the fair market value of each easement, which appraisals she submitted with her tax returns. The appraiser, James Donnelly, determined that prior to the easement the fair market value of the Logan Circle property was $1,250,000 and that of the Vermont Avenue property was $845,000. Donnelly estimated donation of the easement would diminish the value of the former by $162,500 (13 percent), and that of the latter by $93,000 (11 percent). Before the Tax Court, the Commissioner argued Simmons could not claim a charitable deduction because (1) the easements were not granted exclusively for conservation purposes, (2) Simmons had failed to submit qualified appraisals proving the fair market value of the easements, and (3) as shown by an appraisal done by an employee of the Internal Revenue Service, the easements were of no value. The Tax Court disagreed in all respects but held the easements were worth only $56,250 and $42,250 respectively. Simmons v. Comm'r, 98 T.C.M. (CCH) 211, 212 (2009).