Monday, September 30, 2013
Wendy C. Gerzog (University of Baltimore School of Law) recently published an article entitled, Graev: Conditional Façade Easement, Tax Notes, Vol. 140, No. 14, 2013. Provided below is the abstract from SSRN:
In Graev v. Commissioner, the Tax Court decided whether the taxpayers’ donations of a facade easement and cash contributions were conditional gifts and therefore disallowable as charitable deductions under the requirements of the regulations. The court reviewed the facts to determine whether the condition was allowed because it was “so remote as to be negligible.” The taxpayers argued that case law at the time of the donation allowed for a donation of between 10 and 15 percent of the value of the property, and that they had deducted a value constituting 11 percent of the property’s appraised value; that the example provided in Notice 2004-41 did not apply to the specific transaction at issue; that there was no possibility that the charity would return the property; that when the easement deed was recorded, the doctrine of merger extinguished the charity’s refund letter; and that the letter was a nullity under Commissioner v. Procter.