The IRS has issued final regulations (T.D. 9999) clarifying a SECURE 2.0 Act rule that disallows deductions for certain qualified conservation contributions by partnerships or S corporations after Dec. 29, 2022.
Under the rule, a qualified conservation contribution is disallowed if the amount is more than 2.5 times the sum of each partner's or shareholder's relevant basis in the partnership or S corporation.
The final regulations provide guidance for the disallowance rule, including definitions, appropriate methods to calculate the relevant basis of a partner or an S corporation shareholder, the three statutory exceptions to the rule, and related reporting requirements. Learn more.