Eiduk Tax & Wealth
Promoter structures library · 2026-08-26
Syndicated Conservation Easement
Classification A, no legitimate version. There is no compliant way to do this as it is marketed.
Sold as: "conservation investment", "land preservation partnership", "4-to-1", "5-to-1", "charitable land opportunity", "Section 170(h) opportunity"
Two promoters got 25 and 23 years. Five CPAs who referred clients into these deals for commissions went to federal prison. The referral fee is what made them culpable.
The pitch
Invest 50,000 dollars, get a 200,000 to 250,000 dollar charitable deduction, because an appraiser opines the land's highest and best use is a mine, resort, or subdivision that will never be built.
What it costs you if it is wrong
For contributions after December 29, 2022, Sec. 170(h)(7) disallows the deduction OUTRIGHT where it exceeds 2.5 times basis, and Sec. 6662(b)(10) adds 40 percent with no reasonable cause defense. Behind that sit Sec. 6662(h) at 40 percent for gross valuation misstatement, Sec. 6663 at 75 percent for civil fraud, and Sec. 6707A for nondisclosure. Two promoters drew 25 and 23 years, and five CPAs who referred clients for commissions went to federal prison.
Red flags
- The deduction is quoted as a multiple of the investment
- The appraisal exceeds what the syndicate just paid for the land
- The promoter selected the appraiser
- Highest and best use is a mine or resort nobody has begun to build
- Subscription documents are dated before you signed them
Questions to ask the person selling this
- 1What did the syndicate pay for this land, and when?
- 2Who selected the appraiser, and what is the appraised value?
- 3What is the ratio of my deduction to my investment, and who computed it?
- 4Does this clear the Sec. 170(h)(7) 2.5x test, or which exception applies?
- 5How much of my money reaches the land rather than fees and commissions?
- 6Are you receiving a commission for putting me into this?