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In particular, the committee found it appropriate
to expand the types of transfers which will qualify as
deductible contributions in certain cases where the
contributions are likely to further significant
conservation goals without presenting significant
potential for abuse. In addition, the committee bill
would restrict the qualifying contributions where there
is no assurance that the public benefit, if any,
furthered by the contribution would be substantial
enough to justify the allowance of a deduction. In
addition, the committee decided that the treatment of
open space easements should be clarified. [Id. at
9-10, 1980-2 C.B. at 603.]
With our understanding of the statute and its relevant
legislative history in mind, we now turn back to the three
requirements for a qualified conservation contribution.
Respondent concedes that the first and second requirements have
been met; i.e., the conservation easements are qualified real
property interests and the contributee is a qualified
organization under section 170(h)(3). As to the third
requirement, respondent challenges petitioners’ assertion that
the conservation easements protect a relatively natural habitat
of wildlife or plants for purposes of section 170(h)(4)(A)(ii).
Respondent also challenges petitioners’ assertion that the
conservation easements preserve open space in the manner required
by section 170(h)(4)(A)(iii). Petitioners will prevail as to
this issue if (1) they establish either of those conservation
purposes as to the contributions and (2) they meet the
requirement in section 170(h)(5) that the contributions be
exclusively for at least one of those conservation purposes.
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