The IRS issued proposed regulations (REG-112916-23) on a rule that disallows deductions for certain charitable conservation contributions by partnerships or S corporations as the agency continues to focus on abusive syndicated conservation easement schemes.
The proposed regulations would amend the regulations under Secs. 170 and 706 to implement provisions of the SECURE 2.0 Act. The proposed regulations apply to contributions of property made after Dec. 29, 2022.
Those generally covered by the proposed regulations include partnerships and S corporations that make conservation contributions as well as upper-tier partnerships, upper-tier S corporations, partners and S corporation shareholders that receive an allocated portion of the contributions.
The proposed regulations also provide guidance on the statutory exceptions to the new disallowance rule, particularly an exception for family partnerships and S corporations and an exception for contributions made outside a three-year holding period. Learn more.