The U.S. Tax Court held that the Taxpayer was entitled to a lesser charitable contribution deduction for its donation of a conservation easement than the amount claimed on its tax return and was liable for gross valuation misstatement penalty. Taxpayer, a partnership, donated a conservation easement over 157 acres of rural lakefront property. The court rejected Taxpayer’s claimed highest and best use of the property as a lakeside residential development, finding there was no market demand for such a development in that remote location. Using a comparable sales approach, the court determined a before-easement value of $1,376,760 and an after-easement …
