Golf Course Conservation Easements - 2018
Several times this week, I received calls inquiring about the impact of the new proposed tax bill on golf courses. The area most seem to focus on are conservation easements. Depending on the source of the news, the tax benefit afforded to golf courses, clubs and their owners is either a “loophole”, the “Trump Golf-Course Break”, or simply a deduction in the interest of open-space conservation.
The issue of conservation easements arose during Donald Trump’s campaign when news emerged that he might be claiming tax deductions for property on some of his golf courses and estates, including his Mar-a-Lago complex in Palm Beach, Fla.
Regardless of the political implications, the new tax bill appears to preserve the potential for significant income tax deductions for golf course owners for open space conservation easements for those who qualify. According to “Accounting Today” Section 170(e)(1) of the Tax Code allows a deduction for a qualified conservation contribution, which is a contribution of a qualified real property interest to a qualified organization exclusively for conservation purposes. The contribution should include a restriction, granted in perpetuity, on the use that can be made of the real property. The IRS and the Treasury Department said they have targeted some promoters are syndicating conservation easement transactions that offer the opportunity to obtain charitable contribution deductions in amounts that significantly exceed the amount invested. In those transactions, a promoter offers prospective investors in a partnership or other pass-through entity the possibility of a charitable contribution deduction for donation of a conservation easement.
