Page 156 - Virtual Currencies

19:25 - 9-Mar-2023
Page 8 of 15
Fileid: … ons/p561/202301/a/xml/cycle06/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
interest in the property. To figure the value of a 2. You and the organization receiving the is that the property, without the easement,
contribution involving a partial interest, see Pub. contribution must enter into a written would be developed. In determining whether
1457. agreement certifying that the organization the property could be developed, you must also
is a qualified organization and that it has consider any zoning, conservation, or historical
If the only interest you own in real property is the resources and commitment to maintain preservation laws that would already restrict the
a remainder interest and you transfer part of the property as donated. property's potential highest and best use.
that interest to a qualified organization, see the 3. If you make the contribution, you must in- Finally, if a potential highest and best use is
previous discussion on valuation of a remainder being considered that would require a change
interest in real property. clude with your return: in zoning or other restrictions on the property,
a. A qualified appraisal; you must address whether it is reasonably
Qualified Conservation b. Photographs of the building's entire probable that such a change would be permit-
Contribution exterior; and ted. Granting a conservation easement may in-
crease, rather than reduce, the value of prop-
A qualified conservation contribution is a contri- c. A description of all restrictions on de- erty, and in such a situation no deduction would
bution of a qualified real property interest to a velopment of the building, such as be allowed.
qualified organization to be used only for con- zoning laws and restrictive covenants. Example. You own 10 acres of farmland.
servation purposes. If you claim a deduction of more than Similar land in the area has an FMV of $2,000
$10,000, your deduction will not be allowed un- an acre. However, land in the general area that
Qualified organization. For purposes of a less you pay a $500 filing fee. See Form
qualified conservation contribution, a qualified 8283-V, and its instructions. is restricted solely to farm use has an FMV of
$1,500 an acre. Your county wants to preserve
organization is: open space and prevent further development in
• A governmental unit; Qualified real property interest. This is any your area.
• A publicly supported charitable, religious, of the following interests in real property.
You grant to the county an enforceable open
scientific, literary, educational, etc., organi- space easement in perpetuity on 8 of the 10
zation; or 1. Your entire interest in real estate other
• An organization that is controlled by, and than a mineral interest (subsurface oil, acres, restricting its use to farmland. The value
of this easement is $4,000, determined as fol-
operated for the exclusive benefit of, a gas, or other minerals, and the right of ac-
governmental unit or a publicly supported cess to these minerals). lows.
charity. 2. A remainder interest.
The organization must also have a commitment 3. A restriction (granted in perpetuity) on the FMV of the property before
granting easement:
to protect the conservation purposes of the use that may be made of the real property. $2,000 × 10 acres . . . . . . . . . . . . . . . . $20,000
donation and must have the resources to en- FMV of the property after
force the restrictions. Valuation. A qualified real property interest granting easement: . . . . . . . . $12,000
$1,500 × 8 acres .
Conservation purposes. Your contribution described in (1) consists of the following. $2,000 × 2 acres . . . . . . . . . 4,000 16,000
• Your entire interest in real property with
must be made only for one of the following con- you retaining a qualified mineral interest, or Value of easement . . . . . . . . . . $4,000
servation purposes. your entire interest in the real property
• Preserving land areas for outdoor recrea- when someone else owns the qualified If you later transfer in fee your remaining in-
tion by, or for the education of, the general mineral interest and the probability of sur- terest in the 8 acres to another qualified organi-
public. face mining occurring is so remote as to be zation, the FMV of your remaining interest is the
• Protecting a relatively natural habitat of negligible. A qualified mineral interest FMV of the 8 acres reduced by the FMV of the
fish, wildlife, or plants, or a similar ecosys- gives you the right to access subsurface easement granted to the first organization.
tem. oil, gas, or other minerals. You determine
• Preserving open space, including farmland the FMV of the real property absent the More information. For more information
and forest land, if it yields a significant pub- qualified mineral interest in the same man- about qualified conservation contributions, see
lic benefit. It must be either for the scenic ner that you determine the FMV of real es- Pub. 526.
enjoyment of the general public or under a tate. See Real Estate, earlier.
clearly defined federal, state, or local gov- • A remainder interest in real property. You
ernmental conservation policy. determine the FMV of a remainder interest Substantiation of
• Preserving a historically important land in real property as directed earlier under
area or a certified historic structure. There Remainder Interest in Real Property. Noncash Charitable
must be some visual public access to the • A conservation restriction (granted in per- Contributions
property. Factors used in determining the petuity) on the use which may be made of
type and amount of public access required real property.
include the historical significance of the What you need to substantiate your deduction
property, the remoteness or accessibility of The value of the charitable contribution of a depends upon the property being donated and
the site, and the extent to which intrusions perpetual conservation restriction (conservation the claimed value of this property. There are
on the privacy of individuals living on the easement) is the FMV of the easement at the three types of documents that may be required
property would be unreasonable. time of the contribution. In determining the FMV in order to substantiate your contribution.
of a conservation easement, if there is a sub- • Contemporaneous Written Acknowledg-
Building in registered historic district. A stantial record of arm's–length sales of conser- ment (CWA).
contribution of a qualified real property interest vation easements on other properties that are • Form 8283.
that is an easement or other restriction on the the same as or very similar to the donated con- • An appraisal, which in some cases must
exterior of a building in a registered historic dis- servation easement, you must take into account be a “qualified appraisal,” completed by a
trict is deductible only if it meets all of the fol- the selling price of these easements. If there are “qualified appraiser.”
lowing three conditions. no comparable sales, the FMV of the conserva-
1. The restriction must preserve the entire tion easement is generally determined indirectly CWA. You must get a CWA from the charity to
which you contributed property on or before the
as the difference between the FMVs of the
exterior of the building and must prohibit property before and after the grant of the con- earlier of the date on which you file a return re-
any change to the exterior of the building servation easement. The FMV of the property porting the donation or the due date (including
that is inconsistent with its historical char- before the grant of the conservation easement extensions) for filing such return. The CWA
acter. must take into account not only the current use must include a description (but not value) of the
of the property but also an objective assess- property donated and whether the charity gave
ment of how immediate or remote the likelihood you any goods or services in exchange for the
Page 8 Publication 561 (January 2023)