Tax Type
Individual Income Tax
Land Preservation Tax Credit
Description
Land Preservation Tax Credit
Topic
Land Preservation Tax Credit
Date Issued
05-30-2014
May 30, 2014
Re: § 58.1-1824 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of an individual income tax assessment issued to ***** (the "Taxpayers") for the taxable year ended December 31, 2008. I apologize for the delay in responding to your appeal.
FACTS
In November 2008, the ***** (the "Donor") conveyed a conservation easement on a tract of land to a donee. Pursuant to the conveyance of the easement, the Donor registered the donation with the Department for purposes of the Land Preservation Tax Credit (the "Credit"). The Donor requested and was awarded Credit based on an appraisal by an unrelated third party appraiser contracted by the Donor. Subsequently, the Donor transferred a portion of the Credit to the Taxpayers. The Taxpayers claimed the Credit on their 2008 Virginia individual income tax return.
A subsequent review of the Donor's application raised questions about the value of the easement for which the Credit was granted. The Department commissioned an appraisal from an independent third party appraiser. Based on this appraisal, the Credit was revalued and assessments were issued against the individuals that received the transferred Credit. As a result, additional tax and interest was assessed against the Credit holders, including the Taxpayers, for the 2008 taxable year.
In June 2012, the Donor appealed the revaluation of the Credit. The Taxpayers appealed the assessment referencing the appeal filed by the Donor.
DETERMINATION
The Department issued Public Document (P.D.) 14-61 (4/30/2014) upholding the valuation of the easement on the basis that the third party appraisal commissioned by the Department most accurately valued the easement. As such, the assessment issued to the Taxpayers for the 2008 taxable year is upheld. An updated bill, with interest accrued to date, will be issued.
The public document cited and other reference documents are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's website. If you have any questions about this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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Craig M. Burns
Tax Commissioner
AR/1-5112574891.B
Rulings of the Tax Commissioner