Opinion
12105-19
06-01-2022
NORTH BY NORTHWEST III, LLC, BRYAN KELLEY, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Elizabeth Crewson Paris Judge
This case involves respondent's disallowance of petitioner's 2014 conservation easement as not being a qualified conservation easement under section 170(h). On February 4, 2020, the parties filed a First Stipulation of Facts, with Exhibits 1-J to 17-J. On April 8, 2020, at docket entry 26, respondent filed a Motion for Partial Summary Judgment on the grounds that petitioner's conservation easement deed fails to meet the perpetuity requirements of section 170(h)(5)(A), and Treasury Regulation § 1.170A-14(g)(6). On July 2, 2020, at docket entry 43, petitioner filed a Response in Opposition to Respondent's Motion for Partial Summary Judgment asserting nine different grounds, including that Treasury Regulation § 1.170A-14(g)(6)(ii) is invalid.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
On January 7, 2022, at docket entry 76, petitioner filed a Motion for Partial Summary Judgment and a memorandum in support of that motion seeking judgment as a matter of law that the conservation easement contribution made by North by Northwest III, LLC is: (1) a contribution of a "qualified real property interest" that satisfies section 170(h)(1)(A); and (2) a contribution to a qualified organization that satisfies section 170(h)(1)(B). This motion addresses issues other than those related to section 170(h)(5)(A) and Treasury Regulation § 1.170A-14(g)(6)(ii), at issue in respondent's pending Motion for Partial Summary Judgment, described above.
On January 12, 2022, respondent was ordered to respond to petitioner's Motion for Partial Summary Judgment. On March 25, 2022, at docket entry 87, respondent filed a Notice of No Objection to the motion.
Included in the record is the First Stipulation of Facts, which contains a series of warranty deeds, through which petitioner received the surface interest of the subject property, consisting of 300.89 acres identified in the legal description as Tract 3 and reflected in Exhibits 1-J through 3-J. Additional deeds conveyed the mineral interests underlying the 300.89 acres transferred with covenants of warranty to petitioner and are reflected in Exhibits 4-J through 6-J. The real property described in these deeds is the subject of this case.
The First Stipulation of Facts also includes Exhibit 10-J, a copy of a document titled "Deed of Conservation Easement" dated December 20, 2014, between petitioner and The Atlantic Coast Conservancy, Inc. (Conservancy), recorded with the Fayette County, West Virginia, Register of Deeds on December 22, 2014. The Conservancy is the qualified organization in this case.
Summary Judgment
The purpose of summary judgment is to expedite litigation and avoid costly, time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Under Rule 121(b), we may grant summary judgment when there is no genuine dispute as to any material facts and a decision may be rendered as a matter of law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). A partial summary adjudication may be made which does not dispose of all the issues in the case. Id. However, the nonmoving party may not rest upon the allegations or denials in its pleadings but must set forth specific facts showing that there is a genuine issue for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520.
Respondent has notified the Court that he has no objection to the granting of petitioner's Motion for Partial Summary Judgment dated January 7, 2022.
On the basis of the foregoing, it is found that the conservation easement contribution made by North by Northwest III, LLC is: (1) a contribution of a "qualified real property interest" that satisfies section 170(h)(1)(A); and (2) a contribution to a qualified organization that satisfies section 170(h)(1)(B).
After due consideration, it is
ORDERED that petitioner's Motion for Partial Summary Judgment, filed January 7, 2022, at docket entry 76, is granted.