Code Sec. 6662 Accuracy-related gross valuation misstatement penalties-reasonable cause; good faith-charitable contribution deductions.

Code Sec. 6662 Accuracy-related gross valuation misstatement penalties-reasonable cause; good faith-charitable contribution deductions.

Article couretesy of © 2015 Thomson Reuters/Tax & Accounting

Code Sec. 6662 Accuracy-related gross valuation misstatement penalties-reasonable cause; good faith-charitable contribution deductions. (07/30/2015)

Federal Taxes Weekly Alert, 07/30/2015

Accuracy-related gross valuation misstatement penalties-reasonable cause; good faith-charitable contribution deductions.

Accuracy-related 40% gross valuation misstatement penalty was upheld against partnership in respect to its 2005 deduction for charitably donated conservation easement to land trust: taxpayer, claiming multimillion dollar deduction for easement that was found to have zero value, overstated value by 400% or more of correct amount; and although it obtained qualified appraisal and its reliance on appraiser and CPA constituted good faith investigation of easement’s value, it didn’t act reasonably or in good faith regarding Reg. § 1.170A-14(g)(5)(i) ‘s documentation requirements because its baseline documentation was insufficient, unreliable, and incomplete. Accuracy-related 40% gross valuation misstatement penalty was also upheld against 2d partnership in respect to its 2007 deduction for charitably donated conservation easement to land trust, as it also misstated easement’s value by more than 400% for that year and reasonable cause/good faith was no longer available defense to valuation misstatement penalty. (Bosque Canyon Ranch, L.P., et al. v. Commissioner, (2015) TC Memo 2015-130 , 2015 RIA TC Memo ¶2015-130)

Article courtesy of © 2015 Thomson Reuters/Tax & Accounting. All Rights Reserved.

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