The U.S. Tax Court, in a memorandum decision, held that a partnership’s claimed $115 million charitable contribution deduction for a conservation easement was grossly overvalued, with the actual value being only $175,824. The court rejected the partnership’s valuation methods and determined the property’s highest and best use was agricultural, not clay mining as claimed. The court upheld the IRS’s disallowance of $1.1 million in other deductions claimed by the partnership. The Tax Court imposed a 40 percent gross valuation misstatement penalty on the portion of the underpayment attributable to the overvalued easement deduction. It also imposed a 20 percent accuracy-related …
