Obviously we misread your "we deducted @ 90,000 over the next three years". $96K works out to a much more reasonable 8% - still needs to stand up to audit, but it's a pretty conservative number.

A lot of the IRS info that is being posted here is out of date. There was some updates to the law in 2006 (attached to pension benefit legislation by congress). (You easement is earlier, so the restrictions there would not apply, I assume. There has also been some clarification from the IRS (there is a good collection of correspondence here: http://www.architecturaltrust.org/taxadvantage/newsanalysis/irsupdate.asp - the "Trust" is the largest holder (and promoter) of easements, but the information here is objective).

The bottom line is that IRS has backed away from the "no value" position regarding easements in locally-governed historic districts, but they have also reemphasized that a straight percentage deduction is not valid. As @setancre says above, you need before and after appraisals that take into account the impact of the local legislation and any other local factors.

As I said, this is not a dubious scheme - but it is a deduction that the IRS audits frequently.

Posted by: WBer at November 4, 2009 9:00 PM in response to Easement Audit Nightmare

@cmu - it is not a dubious tax-shelter scheme, it is a legitimate tax deduction. You are donating something of value to a non-for-profit (LPC is a government agency, not an historic preservation organization). There are some non-profits that have been established pretty much solely for accepting easements, and these organizations have raised red flags, but there are a lot of legitimate preservation organizations that hold easements as part of their larger preservation program (and by the way, I don't think HDC is one of them).

Posted by: WBer at November 4, 2009 3:00 PM in response to Easement Audit Nightmare

@northridger: thanks for correcting my math - was having trouble multiplying by three this morning. I'm assuming the property in question is a landmark (most private residences that use deduction are), but I don't know. Still, landmark or not, if the numbers are correct that is a very high valuation for the exterior of the building.

Posted by: WBer at November 4, 2009 2:24 PM in response to Easement Audit Nightmare

If (as they planned) they expanded service to the northside and Greenpoint it would help the bottom line. The water taxi is expensive ($4.50 from Schaefer to Wall Street with a multi-trip discount), but, as someone noted, it's a hell of a lot nicer than the L train. And a northside/Greenpoint ferry could help people who don't live in non-luxury who work at NYU Med Center or in the Wall Street area - it's more expensive, but it's quicker (particularly to NYU) and easier. If you have to get on a train or a bus to get to/from the ferry, it's not worth it.

Schaefer - and many other waterfront developments - have used the water taxi as a selling point, and they (either developers or condo boards) should be providing some subsidy too. It certainly won't help property values at Schaefer if the taxi continues to be a part-time proposition.

And it is easy to see how the water taxi can save 35 to 40 minutes for someone working at NYU medical center. It's an 8-block hike to walk to the JMZ (10 minutes at least), and getting to First Avenue from public transport is another long walk. The water taxi is one stop, takes 5 or 10 minutes and leaves you about four blocks away from NYU.

There already is ferry service to Sunset Park (Brooklyn Army Terminal) and the Rockaways - both are subsidized.

Posted by: WBer at November 4, 2009 12:46 PM in response to East River Ferry Service in Jeopardy—Again

Properties that are listed on the National Register can donate facade easements to non-profit groups. As with an open space easement, you are donating control of a piece of your property to a third party, and in return, you are allowed to deduct the value of that donation on your taxes. Any changes you want to make to your facade would - in perpetuity - need to be approved by the non-profit that holds the easement. Not a great burden if its already a local landmark, but potentially a big burden if it's not.

The IRS has been aggressively auditing these donations, focusing on three areas - the appraisal itself, the value of the facade as a percentage of the total value of the property (which in this case sounds like 15%), and whether the donation has any value in a locally landmarked district. The appraisal might be on target, but the IRS could certainly question the 15% if the building is a local landmark (the reasoning being that a third party - LPC - already controls what you can do with the facade, thus diminishing the value of what you are donating to the third party - the IRS would like to set that value at 0%, but past cases put it higher, perhaps in the 8 to 12% range, maybe a bit higher).

Long story short - listen to AEPE, hire a good attorney who is versed in dealing with the IRS and with easement donations.

Posted by: WBer at November 4, 2009 12:16 PM in response to Easement Audit Nightmare

From the looks of it, luxury housing (as a typology) isn't doing either! Of course none of that luxury is on the waterfront, where people might actually pay a lot of money to live. But people aren't paying a lot of money to come to the Viridian, and the locals can't afford the Viridian's prices.

Posted by: WBer at November 3, 2009 12:16 PM in response to Pelli Tower Proposed for Greenpoint Waterfront

arch66 - As BBB notes, it's not like there is the demand in Greenpoint to fill those R6A developments (Viridian), let alone density at this scale. And the R6B inland was not a tradeoff - it was an afterthought (enacted four years after the waterfront rezoning).

Posted by: WBer at November 3, 2009 10:28 AM in response to Pelli Tower Proposed for Greenpoint Waterfront

Good news, but an RFE does mean that designation is at all imminent, even if LPC and everyone else is on board.

Posted by: WBer at November 2, 2009 3:20 PM in response to Landmarking Efforts In Bed-Stuy

@tybur6 - it's a 1,700 square foot one bedroom, which works out to less than $700 a foot. If that's not enough bedrooms for you, get some studs and drywall and add more.

Posted by: WBer at November 2, 2009 2:40 PM in response to Condo of the Day: 85 North 3rd Street, #207

It seems to me that if the leaseholder is vacating, the landlord is within rights to ask for a vacant apartment. If the roommate wants to negotiate with the landlord for the current apartment or the other one, that's her right. But she doesn't have a right to stay in the current apartment absent an agreement with the landlord. The tenant's notice is what is forcing the issue - essentially by giving one-month's notice, you are giving your roommate one-month's notice too.

The roommate is a known quantity for the landlord, and she should be in a good negotiating position. She should deal directly with the landlord, and ask for some time to secure a roommate (in whatever apartment they can agree to). The advantage for the roommate should be that she can negotiate a lease, and no longer be month to month.

Posted by: WBer at October 30, 2009 11:51 AM in response to Shifty Landlord or Poor Planning

Rob, the clinics are on 4th Avenue! But maybe they'll put disinfectant in the plunge pool.

Posted by: WBer at October 28, 2009 4:21 PM in response to The Edge Is Making a List, Checking It Twice

I think the Fisher building on Roebling between 7th and 8th is worse. But pretty much any Kaufman project is worse than both those together.

Posted by: WBer at October 28, 2009 3:06 PM in response to The Edge Is Making a List, Checking It Twice

I think Rob was talking about someone else, no? But since you're defending the Edge - it may be a superior "development", but it is still ugly. The architect just doesn't know when to say no to a sample board, so he accepted all of them. Sometimes less is less, but here, more is more, which is too much.

Northside Piers is a far nicer development, architecturally (less is more). So is 80 Met, the Mill, 268 Wythe and a host of others. There is a lot of good product in this area of Williamsburg, but to me the Edge is the ugliest of the lot (125 North 10th doesn't do much for me either).

Posted by: WBer at October 28, 2009 2:41 PM in response to The Edge Is Making a List, Checking It Twice

Ugly? Check.

(This is Levine Builders, a local developer, not Toll Brothers.)

Posted by: WBer at October 28, 2009 11:57 AM in response to The Edge Is Making a List, Checking It Twice

Benson - I don't know of any initiative in the Council to change the community facility rule, but I would welcome it. At the very least, it should be a discretionary action with some sort of community oversight. Let the locals decide if they want a pediatrician on every corner!

Denton - "retail" signs on empty lots could be developers fishing. If it says "build to suit", most definitely.

Posted by: WBer at October 28, 2009 9:53 AM in response to StreetLevel: Pediatrics Office Coming to 4th Ave

At the risk of injecting some content into this thread, Benson and Denton are both off on the community facility issue (Denton more so). A Zinka says, the area is zoned for commercial use on the ground floor. However, this building, and many like it utilized the community facility "bonus" to grab extra FAR in return for a community facility use - in this case a pediatrician's office. (You can look it up on their NB application - the ground floor is for retail and community facility use. When they get a CO, it will show up there too.)

The community facility hasn't changed the program - it's still there, ripe for abuse. However, the spate of contextual zonings has eliminated it from those areas that were rezoned - the bonus is not allowed in contextual districts.

So - Fourth Avenue IS zoned for retail, but many developers elected to forego that retail in exchange for additional residential FAR above. Expect your health care and social welfare needs to be well served on Fourth Ave.

As you were.

Posted by: WBer at October 27, 2009 4:35 PM in response to StreetLevel: Pediatrics Office Coming to 4th Ave

I meant "goop" not "good". Regardless, it is a dusty and wet proposition to clean, but can be done (hopefully without pissing off your new neighbors!).

As for drafts and such, that may depend on whether or not this is a chimney wall or just an exposed exterior wall. Brick isn't a great insulator, but if it's a chimney wall it may be better (or at least as good as your other exterior walls, which may just be plaster over brick and masonry, without any additional insulation).

Posted by: WBer at October 27, 2009 11:06 AM in response to Removing Paint from Brick Wall

Slap on the wrist.

Five years not developing apartments in a bear market and a fine that the plaintiffs still have to collect (and may never collect)? This is a guy who willfully abused the zoning laws, skirted building regulations and took people's money for a product he knew was defective and illegal, and that's the best the AG's office can do?

Yes, DOB, the architect, the marketers and others were complicit in this travesty, but the fish rots from the head down, and this stinks. I feel sorry for the owners, who are clearly not out of the woods.

Maybe some schadenfreude for some, but no justice here.

Posted by: WBer at October 26, 2009 10:05 PM in response to Mendel Brach Barred from Condo Business

My plumber was able to find all the parts for our clawfoot tub's drain system without leaving Brooklyn. It was 6 or 8 years ago, and I don't remember where he went, but I think the larger commercial (to the trade) suppliers carry that stuff.

Posted by: WBer at October 26, 2009 9:49 PM in response to Claw Foot Tub Overflow

Minard is right - PeelAway (and most other chemicals) require power washing to get out the good in the nooks and crannies. It can be done, but you need a good containment system to catch the run off (before it goes downstairs!) and dispose of it.

Posted by: WBer at October 26, 2009 9:46 PM in response to Removing Paint from Brick Wall

Col. Steve - have to disagree. LPC has approved buildings like this, both contemporary and historicist. Current code requires at-grade entries, and stoops require revokable consent and have other difficulties. I agree that the cornice is wrong for what the building is trying to be, but otherwise, this is a decent interpretation of a historic brick row house. LPC has approved worse in Clinton Hill (I've seen a couple of sore thumbs, can't remember exactly where), and has approved better in CH and Fort Greene (a couple of new ones on Cumberland between Lafayette and Dekalb).

Historicist done right is good, and this looks generally good (though I'm only judging from this one photo). Personally I prefer a more contemporary approach, but whichever way you go, do it right and do it well (and pay attention to the details).

Posted by: WBer at October 14, 2009 12:33 PM in response to 2 Lefferts Comes Into Focus, Exceeds Expectations

If you aren't seeing a new navigation bar, hit reload on your browser.

Posted by: WBer at October 7, 2009 10:01 AM in response to Brownstoner Directory Launches

I'm with Kevin. Overworked, overdone and over the top.

Posted by: WBer at October 2, 2009 10:27 AM in response to The Venetian Unveiled

It wasn't LPC that did the review. As a federally funded project (being done by the state, not the city, I believe), the work falls under Section 106 review, which means that the State Historic Preservation Office has to sign off (the agency getting the funding is responsible for carrying out the review). The SHPO review was looking at the potential engineering significance of the bridge, but I think it also concerned potential archaeological impacts. (This is the same review mechanism that is in play at Admirals Row.)

Last I heard, there is a temporary bridge or roadway proposed while the bridge itself is taken down and replaced. But that may have changed.

Posted by: WBer at October 1, 2009 10:44 AM in response to Contractors Group Lists Saddest El Roadways

Take note - if you live in a commercial building, the City has changed the schedule for annual boiler inspections. The inspections now need to be done by November 15 (not December 31). I think there is also a new form for this.

Posted by: WBer at September 30, 2009 11:22 AM in response to Time to Think About Your Boiler Again

DIBS - not missing the zoning issue - Minard and I were addressing the LPC issue that others raised. If the permit was issued legally, DOB can't pull it. If it turns out that the zoning does not allow a curb cut, garage, whatever, then the permit might be invalidated.

Grand Army - LPC does not trump DOB. If the permit was issued prior to designation, and LPC had their 40-day to review, LPC can't have it pulled. It appears, though, that at least in the case of the curb cut application, LPC did NOT have their 40 days. So that might be cause for invalidating that permit (zoning issues aside).

Posted by: WBer at September 23, 2009 1:01 PM in response to A Curb Cut on Landmarked St. Marks Avenue? Really?

If you have a DOB permit prior to designation, it is grandfathered. If you apply for the permit after calendaring but before designation, there is a 40-day LPC review. Once that review is done (or, in this case, waived), the permit is valid and grandfathered.

With regard to all the blame slinging, I think it's worth backing off until the actual facts are known. While we might not like curb cuts and garages on historic brownstones, the owner was within his rights to apply for this. This is not the case of an owner desecrating a landmark, but rather one of an owner desecrating a POTENTIAL landmark - and legally, at least, there is a difference.

If DOB or LPC dropped the ball (either of which is likely), or something more nefarious happened (less likely, IMHO), then let the poo fly.

Posted by: WBer at September 23, 2009 12:24 PM in response to A Curb Cut on Landmarked St. Marks Avenue? Really?

As others have noted, LPC calendaring should trigger a review. However, as I understand it, LPC approval is not REQUIRED until the designation is actually approved by the City Council. Prior to Council approval, LPC has 40 days to weigh in on an application. In other words, calendaring cannot hold up an application indefinitely. Usually, if LPC doesn't like a proposal they will meet with the owner and try to negotiate something, or, if they want to play hardball, push the designation forward (which is not feasible for a large district designation like PH).

What is interesting about this case is that the 40 day review is listed as a required item for the Alt-1 application (for the garage, etc.) but it was waived - was it waived by DOB or by LPC? BIS doesn't say.

Also of interest, LPC review is NOT listed as one of the required items for the curb cut. So LPC never got a bite at that apple, and may not have gotten a bite at the Alt-1 either.

The 40-day rule also explains why LPC doesn't have an application - prior to designation, there is not an application process. It is possible that LPC knew about this Alt-1 application and didn't do anything; it is also possible that LPC never knew about it. But either way there would not be an LPC "application" on file.

Also, when did City Council approve the designation? I have seen that they were expected to approve on 9/17 and that the actual approval was 9/21. That timing makes a difference for the curb cut. If designation was approved on 9/17, LPC can have DOB pull the curb cut permit (but not the Alt-1). Which would leave the owner with a grandfathered garage but no driveway.

Posted by: WBer at September 23, 2009 12:10 PM in response to A Curb Cut on Landmarked St. Marks Avenue? Really?

That picture makes me seasick.

Posted by: WBer at September 18, 2009 10:22 AM in response to Development Watch: 69 Berry Street

Some vines damage brick and mortar (clingers, as vinca notes); some don't (grabbers, op cit). But all vines shade walls and thus keep walls wet, which is a good reason to remove any climbing vine from a masonry wall.

Grapes, on the other hand, are a good reason to keep the vine!

Posted by: WBer at September 3, 2009 3:10 PM in response to Grape Vines and Brick

Our three-story row house, done over time with two different contractors, cost way less than $10k to skim coat and paint over new sheetrock.

The most recent job was about $800 to skimcoat (not paint) a 300sf hallway, ceiling and walls. They did a fantastic job.

Posted by: WBer at August 28, 2009 12:33 PM in response to Skim Coating

Bohuma - I think COs started in the 1920s. If the occupancy and use did not change between then and now, there was no need to get a CO.

Posted by: WBer at August 26, 2009 4:47 PM in response to No C of O

I can't vouch for Clinton Hill schools, but Williamsburg schools are less than mediocre, and worse still, 84 (in particular) and 17 show little sign of wanting to improve. 84 is considered good (not great) for pre-K and K, but a failing school beyond that, which is why many parents zoned for the school do everything possible to send their kids elsewhere (which is why 84 is at less than 50% capacity). That means getting in to 132, schlepping your kid to the LES or going the private/parochial route.

And since when did "10 foot ceilings(approximate)" become the standard for luxury? 10' is generally a minimum, and when a real estate marketer slips in "approximate" you can be sure that 10' is a generous estimate.

Posted by: WBer at August 25, 2009 1:54 PM in response to 80 Met Receives TCO

The changes to Kent Ave should be better for the entire community - calmer traffic on Kent (it is a highway), better access for business, better greenway layout and more parking (frankly, the least of my concerns).

But DOT seems determined to implement this change with the same ham-fisted lack of planning, mitigation and foresight that they brought to the original changes. Maybe they figure the third time will be the charm?

Posted by: WBer at August 25, 2009 1:39 PM in response to Kent Traffic Shifts to Wythe

Abraham is taking the credit (and claiming it was all his idea, which it wasn't), but as homesweethome says, the real credit lies with Velazquez.

Posted by: WBer at August 20, 2009 2:57 PM in response to Kent Avenue Make-Over Begins

It's not in the Times interview, but I thought what Levine had said (maybe in another recent interview?) is that he didn't need to drop prices *at that point* - the buildings were still under construction, and his financing was comfortable enough that he could wait until a point in time closer to completion to decide whether or not to drop prices to meet Northside.

Sounds like that point in time might be about now.

Posted by: WBer at August 6, 2009 12:51 PM in response to Taking the Edge Off of the Edge? Nope, It Turns Out

Wood?

Metal? (sheet metal? cast iron?)

Scope? Scrape and paint? Replace missing elements? What does the permit allow you to do?

Posted by: WBer at August 5, 2009 12:44 PM in response to Cornice Contractor

Yes - proximity to a church (storefront church, next door) means you can only get a beer/wine license. Don't remember the exact distance, that triggers it, but Bonita is well within it.

I haven't been to Bonita in a couple of years, so I'll take DH's description of the slide in quality on faith. Too bad, as it was a great place.

Dittoburg - you're talking about Matamoros Grocery, no? They lost their lease some time ago, I think. The cart that's set up shop on Bedford between Metro and N 3rd may be the closest to what Matamoros was.

Posted by: WBer at July 24, 2009 1:14 PM in response to Original Bonita to Close

Fake siding over brownstone is not as common as over wood, but not unheard of. If the form of the building is the same as the others on either side, it probably matches in materials. You can probably find out for sure by pulling the tax photo at Municipal Archives (you might not even need to buy it, depending on the quality of the microfilm.

As others have said, removing the siding is not a problem (unless there is asbestos, which was common in asphalt siding but not found in aluminum or vinyl). The expense will be repairing the masonry underneath. Depending on how much detail is left and how much you want to restore, it could be a lot of $$. But even doing the basics of facade repointing, etc. will be necessary - the siding was probably put up as a way of cheaping out on that kind of maintenance, and the presence of the siding has probably only made the problem worse (its not waterproof - it usually traps water on the facade, hastening deterioration - a much bigger problem with wood buildings).

Posted by: WBer at July 8, 2009 3:20 PM in response to Aluminum Siding Removal

Wow - they did all that work in less than 2 months!

The NB permit linked above is a follow up to add a curb cut or such. The real permits were filed in 2006 or 2007.

If they leave it like this, it will match FLW's original color scheme for the Guggenheim. Only without the architecture...

Posted by: WBer at July 8, 2009 3:13 PM in response to Development Watch: 773 Kent Avenue

Call a professional - engineer or architect, then a lawyer.

The "crumbling" sound could be as simple as old plaster keys falling between the lathe and the brick, or behind your drywall. It could also be something a lot more dire.

Posted by: WBer at July 8, 2009 3:09 PM in response to Neighbor Tearing My Wall!

The northeast corner of Grand & Driggs (the site that was contentious during the Grand Street rezoning) has been back in action for a few weeks now. Steel is rising above the fences.

The northwest corner is vacant, and has been for years. It doesn't count as a stalled development, imo.

What this article doesn't say - and what actually IS news - is that there a lot of still-active construction sites in Williamsburg. And even a lot of sites that have started construction since did their survey.

Posted by: WBer at July 6, 2009 3:34 PM in response to Williamsburg Ranks #1 in City's Stalled-Site Sweepstakes

If you read the NYShitty report, the "hipster" tip came from someone who was on Metropolitan Avenue when the fire broke out. Williamsburg always puts on a good show of amateur fireworks, and this past weekend (even without the draw of fireworks on the East River) was no exception.

Posted by: WBer at July 6, 2009 12:13 PM in response to Rosenwach Fire The Morning After

Surprise, surprise. Brooklyn has been the most active borough in terms of speculative real estate development, and Williamsburg and Greenpoint have been the most active neighborhoods in terms of speculative real estate development.

Yes, there have been squatters reported in at least one derelict site - the loft at the sw corner of Wythe and North 9th (diagonally across from Rosenwach, as it happens). That site has been stalled for three or four years.

No, there are not blocks and blocks of vacant lots. But if there is a ground zero, its probably in the area south and east of McCarren.

Posted by: WBer at July 6, 2009 11:49 AM in response to Williamsburg Ranks #1 in City's Stalled-Site Sweepstakes

DH - I think you're referring to the "protection" plan, which they put in place a while ago. This is a new "plan" for which you must "buy" an apartment by August 31 to qualify. The full press release is here: http://www.prlog.org/10268159-home-buyers-can-live-free-for-year-at-northside-piers.html

Not misleading, but also probably not really a "deal" - http://www.brooklyn11211.com/11211side/2009/06/free-condos

Posted by: WBer at July 1, 2009 10:35 AM in response to Come On and Take a Free Ride (at Northside Piers)

To clarify, as tinarina said, LPC can force you replace a door if it was installed without permits. If its grandfathered, though, you can keep it and repair it.

Posted by: WBer at June 25, 2009 4:52 PM in response to LPC-Approved Door Maker?

LPC does not have pre-approved windows or doors, nor do they have pre-approved fabricators. Though many fabricators/installers will tell you they are "landmarks approved", such a thing does not exist.

To say that LPC will never allow a non-custom door is also incorrect. However, each case is different, and it depends on what is there now, what was there historically, and what you propose to install.

LPC cannot force you to replace a door, however if you want to replace a door, you need LPC to approve the new door. If you have a decrepit non-historic door, you could repair it - if you had to replace it, LPC would require that it be historically appropriate.

Posted by: WBer at June 25, 2009 4:09 PM in response to LPC-Approved Door Maker?

Its a carriage house - the one-time (or two-time) deluge of water probably won't hurt anything, assuming nothing has been built out below. In other words, if the building is wood framing carrying wood flooring with no plaster, drywall, finishes, etc. etc., it will not damage anything and dry out pretty quickly (well, assuming anything dries out after our recent weather).

Muriatic acid (hydrochloric acid, HCl) is a standard masonry cleaner. You can also use specialty masonry cleaners (Sure Klean by ProSoCo, many others), but these too tend to be HCl based (some are hydroflouric acid, HFl). In ALL cases, the cleaner should be used at a proper dilution, not at full strength. The dilution, combined with the large amount of water that goes into the pressure washing dilutes a lot of the toxicity/badness/etc. However, you should also check laws on disposal - often it is not legal to simply drop this into the drain.

You can do a lot more damage to your brick (and mortar) with a pressure washer than with HCl, especially if it is an older (pre-20th century) and especially, especially if you are cleaning the interior of a party wall. You should test to make sure that the cleaning will not erode the mortar joints or brick unduly.

Another alternative is grit blasting. Before any preservationists cringe, grit blasting is an allowable treatment under NPS guidelines, provided it is for the interior of industrial or manufacturing buildings. A carriage house interior may qualify. There are all sorts of grit systems out there, from very low-pressure organics (walnut shells, for instance) to sand or other abrasives. It will erode some brick surface (which is why NPS only approves it for interior work), and you want to stay away from very aggressive grits (black beauty, e.g.) and very high pressures.

Last, if the walls are painted, be VERY careful how you remove. Quite likely there is lead there, and grit blasting or washing can move that lead everywhere.

Posted by: WBer at June 24, 2009 5:06 PM in response to Pressure Washing Interior Brick

Not very inspiring. And not very nice to the old building, either. Not sure if its a massive rooftop addition or a bad case of facadomy - or maybe the worst of both worlds?

Posted by: WBer at June 20, 2009 12:43 AM in response to LPC Signs Off on New BAM Performing Arts Building

Old news - http://www.newyorkshitty.com/?p=14765

Also, not the full story - http://www.brooklyn11211.com/archive/2009/06/883-manhattan-avenue.html

Posted by: WBer at June 20, 2009 12:20 AM in response to Streetlevel: 7 Eleven Coming to Greenpoint

@cmu - it is not a dubious tax-shelter scheme, it is a legitimate tax deduction. You are donating something of value to a non-for-profit (LPC is a government agency, not an historic preservation organization). There are some non-profits that have been established pretty much solely for accepting easements, and these organizations have raised red flags, but there are a lot of legitimate preservation organizations that hold easements as part of their larger preservation program (and by the way, I don't think HDC is one of them).

Posted by: WBer at November 4, 2009 3:00 PM in response to Easement Audit Nightmare

The HDC presentation did not sit well with me, but as you can see from their brochure, they claim to be qualified. Caveat emptor.

Posted by: vinca at November 4, 2009 3:12 PM in response to Easement Audit Nightmare

It's sorta like donating your junker car to a charitable organization and taking a tax deduction for the 5k blue book value of the car, even though the charity contracts with a company that tows away and sells the junker for $100 and gets 50 bucks out of the deal. I did that once before the IRS tightened up on that game. Now you can deduct the fair value of the donated car.

If you take a 270k deduction and when the change in value for adding the easement to the property in a landmarked district is de minimus, then I'd say a fair outcome is to argue you were not negligent, made some reasonable attempt to do the legal thing, and pay the tax you should have paid when you took the questionable deduction and try to negotiate the interest and penalties.

Posted by: Bklnite at November 4, 2009 3:18 PM in response to Easement Audit Nightmare

I just read the links that vinca provided, and the IRS one is chilling as it relates to this sort of case. The bulletin is:

"Internal Revenue Bulletin: 2004-28
July 12, 2004

Notice 2004-41
Charitable Contributions and Conservation Easements ".

Note that the bulletin is from 2004.

There's lots of talk about the intent behind the easements, and lots of technical terms, but near the end has the chilling paragraph:

"If the donor (or a related person) reasonably can expect to receive financial or economic benefits greater than those that will inure to the general public as a result of the donation of a conservation easement, no deduction is allowable. Section 1.170A-14(h)(3)(i). If the donation of a conservation easement has no material effect on the value of real property, or enhances rather than reduces the value of real property, no deduction is allowable. Section 1.170A-14(h)(3)(ii)."

Reading the whole document, it's pretty clear the intent of the deduction is to allow someone to deduct when they're making clear donations for conservation purposes that in some way contribute to the public good. For example, if the a rich family gave 20,000 acres of land to the NY/NJ trail conference for public use, they'd probably get a tax deduction for the full value of that land.

In the case of facades....the IRS wants you to show that what you're doing is in the public good, and that you're taking a material financial hit in doing so, and that the organization taking the easement is a true non-profit. If this is an LPC area than I'd say based on those rules you are SOL. If it's not LPC, then there's some wiggle room. But $270K still seems very, very excessive.

A question for vcthomas...did a tax attorney go over this deduction with you when you took it? Or did only the "historic preservation organization" help you out? Hopefully not just the latter. If you're taking any single deductions more than 10K or so it makes sense to have a tax attorney take a look at it. Not doing so just leaves you totally open to scammers and people's skirting the fringes of the IRS tolerance.

Posted by: northridger at November 4, 2009 3:30 PM in response to Easement Audit Nightmare

Ouch, it gets worse if you google it. Take a look here:

http://www.irs.gov/newsroom/article/0,,id=136337,00.html

The document, from 2005, shows that the IRS explicitly considers an easement on a home's facade in an area with a local historic preservation organization to be an invalid deduction. In fact, the article implicitly calls it a notorious tax scam. Here's the relevant bits...it's #9 on the "dirty dozen" scam list from 2005.

"IRS Announces the 2005 Dirty Dozen

IR-2005-19, Feb. 28, 2005

WASHINGTON — The Internal Revenue Service today unveiled its annual listing of notorious tax scams, the “Dirty Dozen,” reminding taxpayers to be wary of schemes that promise to eliminate taxes or otherwise sound too good to be true.

Abuse of Charitable Organizations and Deductions. The IRS has observed an increase in the use of tax-exempt organizations to improperly shield income or assets from taxation. This can occur, for example, when a taxpayer moves assets or income to a tax-exempt supporting organization or donor-advised fund but maintains control over the assets or income, thereby obtaining a tax deduction without transferring a commensurate benefit to charity. A “contribution” of a historic facade easement to a tax-exempt conservation organization is another example. In many cases, local historic preservation laws already prohibit alteration of the home’s facade, making the contributed easement superfluous. Even if the facade could be altered, the deduction claimed for the easement contribution may far exceed the easement’s impact on the value of the property."

Posted by: northridger at November 4, 2009 3:40 PM in response to Easement Audit Nightmare

Yeah, "chilling" if you're trying to get something for nothing.I think I've now lost any sympathy I had at all for OP.

Posted by: cmu at November 4, 2009 3:41 PM in response to Easement Audit Nightmare

If you read that earliern thread bklner referred to, you'll see that "I told you so"

Posted by: Bob Marvin at November 4, 2009 3:50 PM in response to Easement Audit Nightmare

You sure did Bob, and your analysis there appears to have been spot on.

And reading the literature the IRS seems to have chosen to single out this sort of abuse and punish it pretty severely. It explicitly calls for excise taxes and "accuracy related penalties" on top of interest. It looks like the penalties are in the range of 45% to 65% on the excess valuation depending on how bad the IRS wants to view it.

This speech by one Robert Miller gives details on the IRS' view of this:

http://www.irs.gov/pub/irs-tege/miller-speechonconservationeasements.pdf

On top of everything else already mentioned here, he states:

"We also are hearing of charities that tell their historic easement donors that they are entitled to claim, as a façade easement deduction, a fixed percentage of the fair market value of their property.

This, of course, is not accurate, since the rules on the valuation of historic property are based on the facts and circumstances of each case, including prior restrictions on the use or modification of the property."

So, vcthomas, I don't think you're going to have much luck since the IRS is explicitly targetting your exact, precise circumstance. You hit every single warning bell the IRS has on this topic. And to make things worse you claimed a valuation way above what out-and-out scammers were claiming was "reasonable".

I'd normally recommend a good tax attorney, but in this case that might be just throwing good money after bad.

Posted by: northridger at November 4, 2009 4:41 PM in response to Easement Audit Nightmare

Yeah, OP - lot's of folks cheat a little on their taxes, but a bogus 270k deduction ?!? Busted. You profited by the 600k increase in value from 04 to 07 on top of whatever the gain from your original purchase price to the 04 value when you got involved in the scam, so you can probably afford it. tybur6 always has tongue planted firmly in cheek when posting but.....

"I think you should just pay the IRS the money.
Posted by: tybur6"

Posted by: Bklnite at November 4, 2009 4:46 PM in response to Easement Audit Nightmare

Not sure where the number 270K came from...we deducted 96,000.

Posted by: vcthomas at November 4, 2009 7:09 PM in response to Easement Audit Nightmare