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- Sales Price:
Sales price within the past 3 years (required by USPAP and IRS Integrity Act) is substantially lower than the appraiser’s before value or missing from the appraisal. - Highest and Best Use (HBU):
HBU is identical before and after the conservation easement. - Development Approach:
Appraisers use DCF (development approach) for before value without considering the sales comparable approach. - Market Data:
Insufficient market data to justify adjustments. - Absorption Rate:
Unrealistic assumptions regarding the absorption rate.
- Possible Use Vs. Highest and Best Use (See IRS Definition of Market Value)
- Comparable Sales not local
- Lack of approved development plan in DCF
- Engineering Reports/Estimated in DCF
- Unsupported Discount Rates in DCF
- Floating Building Envelopes/Outparcels:
Building envelopes or outparcels are not clearly defined. - Restrictions:
Land use restrictions are not perpetual or adequately defined. - Qualifications:
Appraiser and BDR expert lack proven qualifications. - Contemporaneous Written Acknowledgment:
No letter from the land trust recognizing the donation from the taxpayer. - Appraisal Date:
The appraisal date is more than 60 days before the conservation easement is filed. - Larger Parcel:
Failure to appraise the larger parcel. - Mineral Rights:
Active minerals market exists, but the donor does not own the mineral rights. - Mortgaged Property:
The property is mortgaged, but the bank has not subordinated its lien. - Subdivision:
Excessive subdivision - “Heart of the Watermelon”:
Retaining critical or high-value portions of the property. - CE Document:
“Gray” language exists in the conservation easement document. - IRS Form 8283:
Incomplete submission of Form 8283, with the supplemental statement of facts missing.