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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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The federal government is placing a conservation easement &#

Resolved Question:

The federal government is placing a conservation easement on our property. They are paying 1485.00/acre which will be about 3.7 million dollars. The property is held in a trust with my mother as beneficiary. Does this money qualify for capital gains tax?
Thanks,
Noel Brinkley
Submitted: 6 years ago.
Category: Tax
Expert:  Stephen G. replied 6 years ago.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Stephen E. Grizey :

It should, but get yourself a local CPA as soon as possible to go over this transaction with you.

Stephen E. Grizey :

We can't give you definitive advice here; we can only answer questions & give you are comments & point you in the right direction.

Stephen E. Grizey :

This is too big a transaction not too have local, professional tax assistance & advice.

Stephen E. Grizey :

Please remember to "Accept", it is the only way we get credit for our work. Feedback, if you have time, and bonuses, where you think they are warranted, are always most appreciated.

JACUSTOMER-y855fzjr- :

We do have local cpa's. We're just trying to get a second opinion since they have already given some incorrect advice.

Stephen E. Grizey :

The reference is Revenue Ruling 77-414 which explains that the IRS agrees that it is capital gain income; in fact the rule is that you are able to recover your tax basis tax free first & any then excess is treated as a long-term capital gain. It doesn't sound like that will make any difference to you based upon the size of the trasaction.

Stephen E. Grizey :

Please remember to "Accept", it is the only way we get credit for our work. Feedback, if you have time, and bonuses, where you think they are warranted, are always most appreciated.

Stephen E. Grizey :

I will be happy to answer any follow-up questions you have.

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