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interpretation of the PCR valuation regulation narrowly focuses
on whether there exists a substantial record of sales of
comparable easements, irrespective of whether a comparison of the
sale of the subject easement to such sales of comparable
easements would yield the proper amount of the deduction under
section 170. That misguided approach fails to recognize that a
substantial record of sales of comparable easements must provide
a “meaningful or valid comparison” to be considered a record of
comparable sales. Sec. 1.170A-14(h)(3)(i), Income Tax Regs.
(third substantive sentence).
The meaningful or valid comparison standard serves the
purpose of determining the proper amount of the deduction under
section 170 by establishing the fair market value of the
contributed property rights and does not serve the function of
determining some market value of the subject easement as an
independent objective. Indeed, other portions of the PCR
valuation regulation support that assertion. In the case of a
charitable contribution of a perpetual conservation restriction
covering a portion of the contiguous property owned by a donor
and the donor’s family, the amount of the deduction under section
4(...continued)
value of the easement conveyed because of the nonexistence of
comparable sales records, but the 100th participant would be
limited to establishing a value for the easement conveyed that is
no more than 50 to 80 percent of its fair market value.
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