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Abstract

Qualified conservation contributions, also known as conservation easements, have become a subject of close scrutiny under the Internal Revenue Service within the past decade. One reason for such scrutiny is that conditions are being imposed on these contributions, testing the perpetuity requirement for conservation easement deductions. In order for a condition on the donation to survive, the condition must be “so remote as to be negligible.” The judicial interpretation of the so-remote-as-to-be-negligible standard has fluctuated since its addition to the Treasury Regulations in 1939. Most recently, the Tax Court in Graev v. Commissioner, explored the meaning of the so-remote-as-to-be-negligible standard outside of the traditional grantor/grantee relationship by assessing the likelihood of IRS action. By denying the deduction in Graev, the Tax Court highlighted that a condition based on IRS action, namely the allowance of a deduction, should not be a permissible condition for qualified conservation contributions. This Note will argue that further clarification of the so-remote-as-to-be-negligible standard should be included in the Treasury Regulations. In particular, conditions based on the IRS allowance of a deduction should be explicitly barred from consideration under the so-remote-as-to-be-negligible standard.

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