[WSBARP] Sale of an Easement - Capital Gains?

[Jim Doran]

David:

I am not sure what the answer to this question is but I wanted to make a
comment.  The client is granting a "conservation easement" to the Land
Trust in return for some serious money.  What they are "selling" by
granting the CE is technically a "restriction on development rights".  It
is definitely giving up something but I am not sure that it is a "real
property interest" for tax purposes.  It is certainly related to the
property interest.

Of course when they eventually sell the property with the CE they will
incur a substantial loss of value because of the CE and the restrictions on
the development rights.

i hope this gives you something to chew on.


James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com
www.doranlegal.com

On Wed, May 11, 2016 at 4:09 PM, David Faber <david at faberfeinson.com> wrote:

> I have a client who I've been working with for a couple years and they
> just brought to me a novel issue: they're selling a "conservation easement"
> to a local land trust for six figures. Needless to say, they wish to pay
> either no taxes or long-term capital gains on the sale of the easement
> rather than straight income taxes.  The former (no taxes) is likely
> impossible, but because they have owned the property for more than a year
> and given that the sale of the easement is, to my mind, a sale of a real
> property interest, would it not be accurate to note that they could take
> advantage of the tax savings offered by long-term capital gains taxes?
>
> Best,
> David J. Faber
> Faber Feinson PLLC
> 210 Polk Street, Suite 1
> Port Townsend, WA 98368
> (360) 379-4110
>
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