Easement Deduction Disqualification for Reserved Rights of Surface Mining Methods
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About This Practical Pointer
Gravel, sand and dirt excavation and relocation (known as “borrow pits”) are traditional activities on agricultural and silvicultural lands. Grantors of easements on these properties are faced with uncertainty about their charitable deductions due to varying interpretations of rights associated with mineral interests in the Internal Revenue Code and Treasury regulations. The latest guidance from the Tax Court indicates grantors and land trusts can continue to allow limited and localized “borrow pits” in line with the Treasury regulations.
May 2025 update: Revised to include new Tax Court case law.
January 2023 update: More detail added concerning deductible conservation easements with severed mineral interests.
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