“I didn’t have time to write a short one.” This celebrated sentence from Mark Twain doesn’t fit Judge Albert G. (“Scholar Al”) Lauber’s 66 (count ’em, 66) page epic stitching up North Donald LA Property, LLC, North Donald LA Investors, LLC, Tax Matters Partner, T. C. Memo. 2026-19, filed 2/19/26.

For while he does the standard blow-by-blow ringside call of this off-the-shelf Dixieland Boondockery, he gives us the takeaway up front.

“On its Federal income tax return for [year at issue], North Donald claimed for this donation a charitable contribution deduction of $115,391,000. It asserted that the ‘before value’ of the farmland—its value before being encumbered by the easement—was $439,492 per acre. It thus took the position that the land had appreciated by more than 14,000% in 21 months.” T. C. Memo. 2026-19, at pp. 1-2.

“We conclude here, as we did in J L Minerals, LLC v. Commissioner, T.C. Memo. 2024-93, at *3, that the valuation of the conservation easement ‘was an outrageous overstatement,’ wholly untethered from reality. Employing the comparable sales method, as backstopped by the price actually paid to acquire the property… we find that its ‘before value’ was $2,975 per acre and that its ‘after value’ was $2,300 per acre. The delta between these figures—the reduction in value attributable to the easement—is $675 per acre. The value of the easement—and hence the allowable charitable contribution deduction—is thus $175,824 ($675 × 260.48 = $175,824).

“North Donald claimed $1,157,469 of ‘other deductions’ on its [year at issue] return. This sum included a $1,055,000 ‘consulting fee’ paid to the promoter that marketed the conservation easement to investors and $50,000 paid to a law firm that served as a ‘material advisor’ to the SCE transaction. We find that these expenses constituted nondeductible syndication costs and that the rest of the ‘other deductions’ must also be disallowed.” T. C. Memo. 2026-19, at p. 2.

For the J L Minerals backstory, see my blogpost “Blunging Farblundgeit,” 10/8/24.

IRS’ asserted Section 6663 fraud chops fail, as the deal was fully disclosed on the return. But the Donalds do get hit for the 40% gross valuation misstatement chop.