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The trust conveyed conservation easements on the Duck Lake
property and the Riverbend/M’hoons Bend property to the
Mississippi Land Trust in 2000. Respondent acknowledges that the
Mississippi Land Trust is a qualified charitable organization
under section 501(c)(3). The trust obtained appraisals of the
Duck Lake property and the Riverbend/M’hoons Bend property both
before and after the conservation easements that indicated the
value of the conservation easements was $5,640,000.
Tax Reporting of the Conservation Easement Donations
The trust reported its donation of the conservation
easements on its Form 1041, U.S. Income Tax Return for Estates
and Trusts, for 2000 and reported that the charitable
contribution was allocated to the sole income beneficiary,
petitioner. The Schedule K-1, Beneficiary’s Share of Income,
Deductions, Credits, etc., attached to the trust’s Form 1041
reported the entire $5,640,000 claimed charitable contribution
deduction as passing through to petitioner as the sole income
beneficiary. Petitioners deducted a portion of the trust’s
charitable contribution on their Federal income tax return for
2000 and carried over the balance subject to the adjusted gross
income limitations of section 170(b). Petitioners carried over
and deducted portions of the trust’s charitable contribution on
their Federal income tax returns for 2001, 2002, 2003, and 2004.
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Last modified: May 25, 2011