The IRS has released final regulations that officially classify certain syndicated conservation easement transactions as “listed transactions” — a designation for abusive tax schemes that must be reported to the IRS.
In these arrangements, investors often buy into partnerships that own land, and then claim inflated charitable contribution deductions based on overvalued property appraisals. These deductions are significantly higher than the land’s actual worth, which leads to improper tax benefits.
Under the new rules, participants and material advisors involved in these transactions must report their activities using Forms 8886 (Reportable Transaction Disclosure Statement) and 8918 (Material Advisor Disclosure Statement). Read more.