Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

RP Golf v. Commissioner of Internal Revenue

United States Court of Appeals, Eighth Circuit

June 26, 2017

RP Golf; SB Golf, LLC, Tax Matters Partner Petitioners
v.
Commissioner of Internal Revenue Respondent

          Submitted: February 7, 2017

         Petition for Review of an Order of the Commissioner of Internal Revenue

          Before SMITH [1] , BENTON and SHEPHERD, Circuit Judges.

          BENTON, Circuit Judge.

         RP Golf, LLC claimed a charitable deduction of $16.4 million on its 2003 tax return for donating an easement to the Platte County Land Trust (PLT). The Commissioner of Internal Revenue disallowed the deduction, finding RP Golf did not make a "qualified contribution easement" under 26 U.S.C. § 170(b)(1)(E). After trial, the tax court[2] ruled for the Commissioner. RP Golf, LLC v. Comm'r, 111 T.C.M. (CCH) 1362 (2016). Having jurisdiction under 26 U.S.C. § 7482, this court affirms.

         I.

         In 1997 and 1998, RP Golf acquired land in Platte County, Missouri. It developed two private golf clubs, The National and The Deuce. To fund the purchase, RP Golf obtained loans from two banks: Hillcrest and Great Southern. Hillcrest financed the original purchase in 1997. Great Southern gave a development loan in 2001. Both loans were secured by deeds of trust in property.

         In December 2003, RP Golf granted a permanent conservation easement to PLT, a Missouri not-for-profit corporation. The easement's purpose was to "further the policies of the State of Missouri designed to foster the preservation of open space and open areas, conservation of the state's forest, soil, water, plant and wildlife habitats, and other natural and scenic resources."

         On April 14, 2004, Great Southern and Hillcrest signed subordinations of their mortgages to PLT's right to enforce the easement. Both subordinations state an effective date of December 31, 2003. Also on April 14, RP Golf filed its 2003 partnership tax return claiming a $16.4 million tax deduction for the easement.

         The Commissioner disallowed RP Golf's $16.4 million charitable deduction, claiming it did not meet the requirements for a "qualified conservation contribution" under 26 U.S.C. § 170(b)(1)(E). RP Golf challenged the Commissioner's decision in tax court. After trial, the tax court found RP Golf's easement was "not protected in perpetuity, and, therefore, was not a qualified conservation contribution." RP Golf appeals.

         II.

         This court reviews decisions of the tax court "in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury." Nelson v. Comm'r., 568 F.3d 662, 664 (8th Cir. 2009). Factual findings are reviewed for clear error, and legal determinations de novo. Scherbart v. Comm'r, 453 F.3d 987, 989 (8th Cir. 2006).

         RP Golf sought the charitable tax deduction for a "qualified conservation contribution." 26 U.S.C. § 170(b)(1)(E). A "qualified conservation contribution" is a contribution of 1) a real property interest, 2) to a qualified organization, 3) exclusively for conservation purposes. 26 C.F.R. § 1.170A-14(a). Only the third requirement is at issue here: whether the property was donated "exclusively for a conservation purpose." Id.

         The conservation purpose must be "protected in perpetuity." 26 U.S.C. § 170(h)(5)(A). "The Code does not define the phrase 'protected in perpetuity, ' or otherwise describe how a taxpayer may accomplish this statutory mandate." Mitchell v. Comm'r, 775 F.3d 1243, 1247 (10th Cir. 2015). The Commissioner's regulations elaborate on the protected-in-perpetuity requirement. See Comm'r v. Engle, 464 U.S. 206, 226-27 (1984) (recognizing that 26 U.S.C. ยง 7805 authorizes the Commissioner ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.