Judge Christian A. (“Speedy”) Weiler defoliates another bunch of syndicated conservation easements with the “Joy Forever” Gambit. Here’s Green Valley Investors, LLC, Bobby A. Branch, Tax Matters Partner, et. al., Docket No.  17379-19, filed 5/27/21*, and three (count ’em, three) other syndicates.

It’s the same old “improvements out” at extinguishment story. For those coming late to this non-party, check out Section 1.170A-14(g)(6)(ii), Income Tax Regs. (the “Proceeds Regulation”).

And Judge Speedy lives up to his cognomen, as he takes us through the caselaw at warp speed.

“The Proceeds Regulation does not provide that ‘any amount, including that attributable to improvements, may be subtracted out’ of the proceeds. PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d 193, 208 (5th Cir. 2018); see also Coal Prop. Holdings, LLC v. Commissioner, 153 T.C. 126, 138-40 (2019). Thus, language that subtracts the amount attributable to improvements from a condemnation award before calculating the percentage of the proceeds that would go to the donee violates the Proceeds Regulation. See, e.g., PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d at 207-0 8; Coal Prop. Holdings, LLC v. Commissioner, 153 T.C. at 138-40; Sells v. Commissioner, T.C. Memo. 2021-12, at *14; Red Oak Estates, LLC v. Commissioner, T.C. Memo. 2020-116, at *15; Cottonwood Place, LLC v. Commissioner, T.C. Memo. 2020-115, at *15; Smith Lake, LLC v. Commissioner, T.C. Memo. 2020-107, at *8-*9; Engelwood Place, LLC v. Commissioner, T.C. Memo. 2020-105, at *9; Hewitt v. Commissioner, T.C. Memo. 2020-89, at *5; Oakbrook Land Holdings, LLC v. Commissioner, T.C. Memo. 2020-54, at *37-*38.” Order, at p. 7.

I’ve blogged all, or almost all, of these.

But because the Greenvalleys have appraisals, IRS loses its attempt at summary J on the overvaluation chops. There are questions of fact what the true values of the easements might have been at date of donation. So on to the trial, maybe.

Need I add that Judge Holmes’ comment about the need for trials following “very contestable readings of what it means for an easement to be perpetual” remains the ghost at the banquet. See my blogpost “They Always Must Be With Us,” 5/12/20.

*Green Valley 17379-19 5 27 21