BC Ranch II, LP v. CIR, No. 16-60068 (5th Cir. 2017)Annotate this Case
BCR Partnerships claimed that the Commissioner wrongfully disallowed their charitable deductions for two conservation easements, and contended that in ruling for the Commission, the Tax Court wrongfully classified the sale of limited partnership interests as disguised sales and wrongfully imposed a gross valuation misstatement penalty. The Fifth Circuit vacated the Tax Court's holding regarding the perpetuity of the easements and the baseline documentation, and remanded for consideration of the other grounds asserted by the Commissioner to support the disqualification of the easements as charitable deductions but not addressed by the Tax Court. The court vacated the Tax Court's determination that the entirety of the limited partners' contributions were disguised sales, and remanded for a determination as to the correct amount of any taxable income that resulted from the disguised sales. Finally, the court vacated and remanded to the Tax Court for it to determine whether the gross valuation misstatement penalty was applicable and if so, the proper amount of any penalty.