WealthPRIME Technology, Inc. is now open to accredited investors interested in tax mitigation strategies by utilizing conservation easements
The decision was important because it upheld the validity of a partnership whose business was not profitable but for the possibility of tax credits.
LOS ALTOS, Calif., Oct. 21, 2022 /PRNewswire/ -- On August 5th, the U.S. court of Appeals for the District of Columbia Circuit rejected the IRS's position that Cross Refined Coal LLC was not a bona fide partnership for tax purposes. The decision was important because it upheld the validity of a partnership whose business was not profitable but for the possibility of tax credits. The Courts have long upheld that Congressional intent to incentivize certain investments that meet recognized national objectives through the application of tax credits and charitable contribution deductions take precedent over economic substance interpretations by the IRS.
This ruling further opens the window for new tax-preferred investments such Conservation easements. Conservation easements are gaining favor as a prepared investment for conservation-minded, high-net-worth investors who utilize this Congressionally incentivized program to offset up to 50% of their ordinary income and capital gains. In January 2021, The Biden Administration issued Executive Order #14008 with the goal of protecting 30% of U.S. land and water to conserve biodiversity and curb greenhouse gas emissions. The Administration report America the Beautiful, issued May 2021, called out federally deductible conservation easements donated by the private sector as instruments likely to play an important role in the Administration's conservation strategy.
This rejection by the District of Columbia Circuit Court is in alignment with several new interpretations from the Sixth and Eleventh District Courts and the Tax Court that have preserved this cherished investment, and curb aggressive IRS tendencies to counter Congressional intent.
In the past, these investments have been "listed transactions" requiring filing with the IRS. Investors in high tax brackets who have sought the maximum tax deduction (generally 4x or 5x) have had to submit under the listed requirement.
There are currently proposals in Congress which would remove the "listed transactions" IRS filing, but could reduce future tax savings. While we cannot predict what bills will pass into law, current law provides investors a window with the maximum possible deduction.
While the Charitable Conservation Easement Program Integrity Act (Wyden/Stabenow/Grassley/Daines) was a topic of discussion among Democrats as they negotiated the reconciliation bill, the bill that passed - the Inflation Reduction Act (formerly Build Back Better) - does not include any language limiting deductions for donations of conservation easements. Further, the removal of previous retroactivity language in proposed legislation means current investors will enjoy grandfather status should legislation pass in the future.
WealthPRIME, based in San Carlos, California, is a leading provider of conservation easement opportunities.
Dan Harding
[email protected]
(415) 205-6500
WealthPRIME Technology, Inc.
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SOURCE WealthPRIME Technology, Inc.
