Opinion
3412-22
03-10-2023
SAVANNAH SHOALS, LLC, GREEN CREEK RESOURCES, LLC, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Joseph Robert Goeke Judge
On February 10, 2023, respondent filed a Motion for Partial Summary Judgment that Savannah Shoals, LLC (Shoals) failed to attach a qualified appraisal of a conservation easement to its partnership return (Motion #1), and a Motion for Partial Summary Judgment that Shoals failed to provide sufficient documentation to the donee to establish the condition of the property and its natural resources at the time of the donation in accordance with Treasury reg. § 1.170A-14(g)(5)(i) (Motion #2). On March 8, 2023, petitioner filed Oppositions to both Motions.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code (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.
Standards for 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) the Court may grant summary judgment when there is no genuine dispute as to any material fact 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). In deciding whether to grant summary judgment, we construe factual materials and inferences drawn from them in the light most favorable to the nonmoving party. Id. The nonmoving party may not rest upon mere allegations or denials of his pleadings but instead must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d); see Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
Motion #1
Taxpayers are required to attach a copy of a qualified appraisal to their returns for any charitable contribution deduction of more than $500,000. § 170(f)(11)(C). An appraisal is a qualified appraisal if it is treated as such under regulations or other guidance prescribed by the Secretary.
Respondent asserts that the appraisal attached to Shoals' partnership return is not a qualified appraisal because of inconsistencies contained in the appraisal and its failure to provide required information. Petitioner has set forth specific facts that establish that there is a genuine dispute of material fact as to whether the appraisal is a qualified appraisal as prescribed by Treas. Reg. § 1.170A-13(c)(3)(i) and (ii). Accordingly, we will deny Motion #1.
Motion #2
When restrictions are contained in an easement deed with regard to a particular natural resource to be protected, the donor is required to provide baseline documentation to the donee before the donation that is sufficient to establish the condition of the property at the time of the donation and the condition of the protected natural resource at or near the time of the gift. Treas. Reg. § 1.170A-14(g)(5)(i).
Respondent asserts that the baseline report does not comply with Treas. Reg. § 1.170A-14(g)(5)(i). Specifically, he asserts that the baseline report does not establish the water quality at the time of the donation. Assuming that the regulation applies to the easement deed, petitioner has set forth specific facts that establish there is a genuine dispute of material fact regarding the terms of the easement including the easement's protection of water or other natural resources and the existence of restrictions that affect water quality or other conservation values as they relate to the contents of the baseline report. Accordingly, we will deny Motion #2.
Upon due consideration, it is
ORDERED that respondent's Motion for Partial Summary Judgment relating to the failure to provide a qualified appraisal is denied. It is further
ORDERED that respondent's Motion for Partial Summary Judgment relating to the sufficiency of the baseline report is denied.