Opinion
14433-17 14434-17 14435-17
06-14-2021
Habitat Green Investments, LLC, MM Bulldawg Manager, LLC, Tax Matters Partner, et al Petitioners v. Commissioner of Internal Revenue, Respondent
ORDER
David Gustafson Judge
Pursuant to the court's order of May 26, 2021 (Doc. 47), the parties filed status reports (Docs. 48-49) to address questions posed in the order about a prior land sale in 2005 (the "original sale") that included the tracts of land over which conservation easements were later granted in 2013 in each of these consolidated cases. To paraphrase the two questions in our prior order (Doc. 47), we asked the parties to confirm whether these three consolidated cases all involve easements over land that was conveyed in the original sale, and whether there are any other cases pending in the Tax Court involving a conveyance of a conservation easement over land conveyed in the original sale.
Background
Based on the filings in these cases to date, we understand the following to be the relevant facts to resolve our questions.
The original sale
Respondent's status report offers additional background for the original sale and attaches the deed of the transaction, to wit: a limited warranty deed filed January 28, 2005, and recorded in Glynn County, Georgia, in which Thad Carter, a/k/a Nathaniel A. Carter, Jr., conveyed a fee simple interest in 2, 783-acres of land in Glynn County (the "parent tract") to St. Andrews Plantation, LLC ("St. Andrews"). The document stamp on the first page of the deed indicates that transfer tax of $23, 615.80 was paid in respect of the transaction, which petitioners and respondent have referred to as a sale of the parent tract. In prior filings respondent has asserted that the total sales price on the transaction was $23, 615, 590, see dkt. No. 14433-17, Doc. 17 p.3. From the record it appears that the original sale in 2005 was the last time that any of the parcels of the parent tract at issue in these consolidated cases were sold in a bona fide arms-length transaction.
Subsequent grants of easement over the parent tract
The first grant of easement over a parcel from the parent tract was a grant of easement that St. Andrews itself made to Georgia Land Trust ("GLT") in 2011; St. Andrews conveyed two additional easements to GLT in 2012. See Doc. 49 at 3; St. Andrews Plantation, LLC, Joseph N. McDonough, Tax Matters Partner v. Commissioner, dkt. No. 20849- 17 (the "St. Andrews case") (Doc. 37 at 3). In subsequent years easements were granted over seven additional parcels from the parent tract, for a total of 10 grants of easement over parcels of the parent tract since the original sale. Three of those additional seven easements are the easements at issue in these consolidated cases, all of which were grants of easement made in 2013 by entities other than St. Andrews to GLT. See Doc. 49. (St. Andrews made direct transfers of the entire tracts at issue in dkt. Nos. 14433-17 and 14435 to Habitat Green Investments, LLC and Green Creek, LLC, respectively; the tract at issue in dkt. No. 14434-17 comprised two transfers to Turtle River, LLC: one from St. Andrews, and another from Cabbage Bluff, LLC, which obtained it from St. Andrews.) See Doc. 48.
Tax Court cases involving parcels from the parent tract
Based on the information recited above, there are four cases currently pending in the Tax Court that involve grants of easement over land conveyed in the original sale: these three consolidated cases, and the St. Andrews case. The easements at issue in these four cases constitute 6 of the 10 easements granted over parent tract. The four remaining grants of easement are not associated with any cases pending in the Tax Court.
Discussion
The status reports that the parties have filed to date have been helpful to the Court's understanding of some common facts in these consolidated cases. A few questions remain, the resolution of which may aid in conserving judicial resources in the continued litigation of these cases.
Stipulations of fact regarding the original sale and subsequent transfers
It would be helpful to the Court for the parties to include in their stipulations of fact as many facts as possible regarding the original sale, including whether, in each case, the original sale did in fact constitute the last bona fide arms-length taxable transaction in which the land subject to the easement(s) in that case was transferred. Also helpful would be stipulations of fact about the acquisition of any interests in the LLCs that occurred before the donation of the easements at issue.
Consolidation
Because the common facts in these three consolidated cases are also common to the St. Andrews case, because the parties in all four cases are represented by the same counsel, and because all four cases are currently assigned to the same judge and are in a posture in which a trial will require valuation of the easements at issue, the Court would like to hear whether the parties believe it would be appropriate to consolidate the St. Andrews case with these cases.
Based on the foregoing, it is
ORDERED that the parties be prepared to discuss these issues at the upcoming telephone conference with the Court, currently scheduled for June 15, 2021, at 10:00 a.m. EST.