Lodebar Property, LLC v. Commissioner, No. 11780-20 (U.S.T.C. May 11, 2022)

Summary of Facts and Issues: In 2016 Lodebar Property LLC (Lodebar) acquired roughly 410 acres of land in Liberty County. Around the same time, various syndication investors purchased a 97% interest in Lodebar for $2.1 million. In December 2016, Lodebar granted to the Southern Conservation Trust (SCT) a conservation easement over 391 acres of the property and claimed a deduction of $14.5 million. The easement stated in several sections that the protected property was 391 acres, but at one location in Exhibit A mistakenly noted the acreage as 2,593. In addition, the easement stated that Lodebar was the grantor, except in one location on the signature page it mistakenly listed the grantor as another LLC. The IRS moved for summary judgment, claiming that these scrivener’s errors meant that there was not valid grant of a conservation easement under state law.

Holding: The Tax Court denied the IRS motion for summary judgment and the case proceeds to trial.

Analysis and Notes: Although there appear to be serious valuation issues in this case, the IRS’ argument over the scrivener’s errors was notably weak.

• State: Georgia

• Procedural Status: Case active.

• Date: 2022

• Keywords: Charitable deduction; Internal Revenue Code; private conservation easement; proceeds provision; scrivener’s error; syndication; termination; valuation.