Prop. Regs. Issued on Conservation Easement Deduction Disallowance
Prop. Regs. Issued on Conservation Easement Deduction Disallowance
IRS's proposed regulations under the SECURE 2.0 Act aim to curb abuse in charitable conservation contributions—seeking feedback for fair tax practices and deductions.
The IRS recently proposed regulations under the SECURE 2.0 Act of 2022 to disallow deductions for specific charitable conservation contributions by partnerships or S corporations, aiming to combat abusive syndicated conservation easement schemes.
Enacted as part of the Consolidated Appropriations Act, 2023, these regulations, affecting qualified conservation contributions made after December 29, 2022, limit deductions to 2.5 times the sum of each partner's or shareholder's relevant basis. They offer clarity through definitions, computational guidance, and examples. The regulations target partnerships, S corporations, upper-tier entities, partners, and shareholders involved in these contributions, outlining exceptions for family partnerships and those made outside a three-year holding period. The IRS seeks comments and plans a public hearing for January 3, 2024, emphasizing the importance of feedback before finalizing these regulations.
This move follows previous efforts to identify syndicated conservation easement transactions and address abusive schemes, reflecting the IRS's commitment to curbing inflated tax deductions within these practices.
