The Pellucid Perspective - January 2016 - (Page 6)

golf course taxation Courses denied tax deduction for conservation easements By Praba 'Bobby' chandran, MafM, cPa rustic canyon golf course, Moorpark, ca 6 The Pellucid PersPecTive www.rusticcanyongolfclub.orgw H ow many of you have hit your ball off the fairway into an area sometimes fenced, marked "environmentally sensitive area". Well, i have. in the Los Angeles area of southern California where i live and play, there are at least two courses that fall into this category. i have had the unpleasant experience of not being able to step into this 'environmentally sensitive' areas to retrieve my ball, let alone hitting it from where it lay. Angeles National Golf Course in sunland, CA and rustic Canyon Golf Course in Moorpark, CA are two of the many courses nationwide where you encounter environmentally sensitive areas right in the middle of or adjoining the fairways. When the ball enters one of these areas, you are forced to deal with issues like, "point of entry," "one or two club lengths" and "correct drop," etc. recently, the Us tax Court was called in to rule on a dispute involving the issue of these environmentally sensitive areas being part of a golf course. Before anyone rushes to the conclusion the ruling had anything to do with the UsGA rules of golf, let me assure you that the dispute had to do solely with irs tax regulations. Here are the facts from the opinion rendered by the Us tax Court on december 9, 2015. ( JoHN A. AtKiNsoN ANd JUdY B. AtKiNsoN, Et AL., Petitioners v. CoMMissioNEr oF iNtErNAL rEVENUE, respondent (t.C. Memo. 2015-236). A group of taxpayers claimed charitable contribution deductions in 2003 and 2005 arising from two conservation easements granted to an operating golf course in North Carolina. The golf courses are The Members Club Golf Course and The reserve Club Golf Course within the st. James Plantation in southport, NC. The claimed deductions were $5,223,000 plus expenses for tax year 2003 for a conservation easement and $2,657,500 plus expenses for tax year 2005 for a conservation easement. For the claimed deductions to be allowed, the conservation easement must comply with section 170(h) of the irs Code which requires: (1) the contribution of a "qualified real property interest," (2) that the contribution be made to a "qualified organization" and (3) that the contribution be "exclusively chandran for conservation purposes." photo courtesy chemoil Editor's NotE: The author, Praba "Bobby" Chandran, is a CPA and member of the executive committee of the sri Lanka America Golf Club (sCGA affiliate) in charge of membership and member welfare. He can be reached at bobby@chandracpa. com, (310) 621-0875. January 2016

Table of Contents for the Digital Edition of The Pellucid Perspective - January 2016

2015 industry tale of the tape: What will the numbers tell us?
Uneven lies in search of a level playing field
Courses denied tax deduction for conservation easements
One-year anniversary of revolutionary course management technology product
December golf weather impact: Near-record for much of Northern US!
Chicago: Bull-ish on supply, Bear-ish on demand
Braving the third party tee time wilderness

The Pellucid Perspective - January 2016