- 10 - subdivision property. Neither of the experts in this case assumed petitioner's property is subdivision property. A conservation easement frequently is granted by deed of gift; consequently, there is rarely an established market from which to derive fair market value. See Symington v. Commissioner, 87 T.C. 892, 895 (1986). If no comparable sales of easements are available to determine the value, the easement is generally valued by a "before and after" analysis, comparing the fair market value of the property before the granting of the easement with the fair market value of the property after the granting of the easement. Browning v. Commissioner, 109 T.C. 303, 315 (1997); Stanley Works v. Commissioner, supra at 399; Hilborn v. Commissioner, supra at 688; sec. 1.170A-14(h)(3)(i), Income Tax Regs. The reduction in the property's value by reason of the encumbrance is the fair market value of the easement. There is no mechanical application of the before and after methodology when other reliable indicators of market value are available. In explaining the legislation that permitted the deduction for qualified conservation contributions, the Senate Finance Committee remarked about easement appraisal methodology as follows: conservation easements are typically (but not necessarily) valued indirectly as the difference between the fair market value of the property involved before and after the grant of the easement. (See Rev. Rul. 73-339, 1973-2 C.B. 68 and Rev. Rul. 76-376, 1976- 2 C.B. 53.) Where this test is used, however, thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011