Mitchell v. Comm'r
106 T.C.M. 215
Tax Ct.2013Background
- Mitchells bought 105-acre parcel in 1998; added improvements 2000–02.
- Charles purchased 351 additional acres in 2001; created Lone Canyon Ranch partnership in 2003.
- Conservation easement on 180 acres granted to Conservancy in 2003; deed of trust not initially subordinated.
- Mortgage subordination occurred in 2005; Love appraisal valued conservation easement at $504,000.
- IRS disallowed 2003 charitable contribution deduction; case previously decided Mitchell I (2012).
- This supplemental opinion grants vacatur to consider motion to reconsider Mitchell I in light of Kaufman III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Intervening law changes require reconsideration? | Kaufman III is intervening change; warrants reconsideration. | Kaufman III not intervening change; does not apply to Mitchell I. | Kaufman III does not require reconsideration. |
| Does subordination regulation require present subordination at the gift? | Subordination could be satisfied by later agreement; not strictly time-bound. | Subordination must be in place at the time of the gift. | Subordination must be in place at the time of the gift; earlier subordination insufficient. |
| Does the proceeds regulation require post-extinguishment proceeds to be protected? | Post-extinguishment proceeds should satisfy the proceeds requirement. | Proceeds requirement strict; needs enforceable right to proceeds. | Regulation requires enforceable right to proceeds; Kaufman III does not control this case. |
| Is there a Colorado-law basis to reconsider Mitchell I? | Colorado law may supply additional restrictions protecting easement. | Reconsideration is not for rehashing new theories; Colorado law not persuasive here. | Colorado-law theory rejected for reconsideration. |
| Do Kaufman II/Carpenter interpretations affect Mitchell I? | Kaufman III undermines Kaufman II/Carpenter; should influence here. | Kaufman III different issue; not binding for subordination issue. | Kaufman III does not alter Mitchell I’s result. |
Key Cases Cited
- Kaufman v. Comm'r, 687 F.3d 21, 687 F.3d 21 (1st Cir. 2012) (intervening appellate ruling on post-extinguishment proceeds)
- Kaufman v. Comm'r, 136 T.C. 294, 136 T.C. 294 (2011) (Kaufman II; subordination and proceeds issues; vacated in part by First Circuit)
- Kaufman v. Comm'r, 134 T.C. 182, 134 T.C. 182 (2010) (Kaufman I; summary judgment and issues on easement)
- Carpenter v. Commissioner, T.C. Memo. 2013-172, T.C. Memo. 2013-172 (2013) (rigid interpretation of g(6) and related regs)
- Simmons, 646 F.3d 6, 646 F.3d 6 (D.C. Cir. 2011) (discusses restrictions for conservation purposes)