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1. Held: P did not make a contribution of a
qualified conservation easement under sec. 170(h)(1),
I.R.C., because the attempted grant did not satisfy the
conservation purposes required under sec. 170(h)(4)(A),
I.R.C. Specifically, the deed did not preserve open
space or a historically important land area or
certified historical structure.
2. Held, further, Ps are liable for a 20-percent
penalty for negligence under sec. 6662, I.R.C.
J. Carlton Howard, Jr., for petitioners.
John M. Altman and Linda R. Averbeck, for respondent.
GERBER, Chief Judge: Respondent determined a $178,168
income tax deficiency and a $56,537 accuracy-related penalty
under section 66621 for petitioners’ 1999 taxable year. After
concessions,2 the issues remaining for our consideration are:
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2 The parties settled the portion of respondent’s income
adjustments or penalties relating to the determination of an
increase in the net gain from FAC Co., L.C., and a decrease in a
home mortgage interest deduction. The parties agree that the
$62,045 home mortgage interest deduction that petitioners
claimed, and which respondent determined was $38,670, should be
$56,872. The parties also agree that the portion of a $892,578
gain that petitioners reported on their return from FAC Co.,
L.C., an entity in which petitioners have a 60-percent interest,
and which respondent determined was $1,215,027, should be
$1,081,578. Finally, respondent concedes the portion of the
penalties attributable to the home mortgage interest deduction
and the net gain from FAC Co., L.C.
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