Lumpkin One Five Six, LLC v. Commissioner

In a proceeds clause case with the improvement deduction language, the Tax Court denied the deductions in full, following Oakbrook Land Holdings LLC, v. Commissioner and Coal Property Holdings, LLC v. Commissioner. The Tax Court declined to consider the IRS' argument on the floating building areas.

IRS disallowed a CE deduction in full due to missing basis on Form 8283.Tax Court found for the IRS that taxpayer had not substantially complied and that the information is reasonably obtainable and necessary. The tax court follows that of RERI Holdings I, LLC v. Commissioner, 149 T.C. No. 1.

The Tax Court upheld the validity of the proceeds regulation and found the improvements clause to violate the regulation. It also determined that conditional language constituted a savings clause and was therefore unenforceable.

In an unpublished order, the Tax Court denied the IRS’ motion for summary judgment reserving the proceeds issue for trial, found the deemed approval provision as not fatal because of the limitations, and rejected that the building area was “moveable.”

Following Belk v. Commissioner, the Tax Court held that the conservation easement did not qualify for a charitable deduction because there was no 'qualified property interest' as required by section 170(h)(2)(C).