Scheidelman v. Commissioner, 755 F.3d 148

Taxpayer donated a façade conservation easement to the National Architectural Trust to claim a §170(f)(3)(B)(iii) deduction for 2004.
Fort Greene Historic District in Brooklyn is a designated historic district with LPC oversight and NYC historic preservation restrictions.
Drazner valued the easement at $115,000, used to support the deduction, and Ehrmann prepared competing appraisal for trial.
Tax Court initially held the Drazner appraisal insufficient to establish a qualified appraisal; on appeal the circuit remanded for de novo valuation.
On remand the Tax Court found the easement did not diminish the property's fair market value, affirming the deduction denial.
The central issue is whether the easement had a material negative impact on FMV and thus supports or defeats the deduction.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the easement reduced fair market value.	Scheidelman argued the easement reduces FMV.	The Commissioner contends no material FMV reduction.	Easement did not diminish FMV; deduction denied.
Whether the Tax Court properly weighed the evidence and relied on credible appraisal.	Drazner/Ehrmann reports support a deduction.	Their reports were flawed or unpersuasive; Barnes and Dinklage provide credibility for no FMV impact.	Tax Court's weight of evidence supported no FMV impact.
Whether § 7491 burden-shifting applies to the outcome.	Scheidelman may trigger the §7491 burden shift.	Even if applicable, substantial evidence supports the Commissioner’s position.	Burden shift ultimately immaterial; substantial evidence favors Commissioner.

Comm'r v. Scottish Am. Inv. Co., 323 U.S. 119 (1944) (taxonomy of Tax Court factual findings and weighing of evidence)
Wilson v. Comm'r, 500 F.2d 645 (2d Cir.1974) (limitations on overturning Tax Court factual findings; substantial evidence standard)
Sisto Fin. Corp. v. Comm'r, 149 F.2d 268 (2d Cir.1945) (valuation is an approximation; deference to Tax Court on value)