re: Fee Simple “Investment” - Tax Play

NO!

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such as claiming there is a very profitable mineral on the land that could be mined

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I declare profitable minerals!

In my Michael Scott voice.

LOL

Do not do this. Get a new CPA.

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But given that the entire point of investing in these things is to reduce taxes

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The point of an “investment” is for the stock, property, object, asset, etc to increase in value over an interval of time.

Taxes are part of life. Abiding by the tax code is part of investment evaluation.

BUT this scheme is “too good to be true.”

There are some “tax” things that you can work in your favor. When I’m through with a car, I donate to a car ministry that gives the full value of the car as a tax deductible amount. This is LEGAL because they GIVE the car to someone in need- not auctioned off for money(which is all you can deduct in that setting.)

Donating appreciated securities is legal and can save you taxes.

And don’t think that having a 1099 business is the golden ticket to a life of tax deductions. Every business expense must be documented. You can’t join 4 golf clubs and take the fees off as business expenses. You can’t take every lunch as a business expense. You can’t take football tickets as a business expense, and on and on and on.

When I started a 1099 business, a friend said, “you’re going to have it great, you’ll get to deduct so much.” He did not know the rules or tax code.

Invest your money for the long term. Don’t put all your eggs in one basket. Trees don’t grow to the sky.

South sea bubble, Tulipmania.

Manias, crashes, panics.

Quit wasting energy on elaborate schemes. There is no free lunch. Nothing is easy. The IRS is not retarded.

Why would anyone give you the opportunity to avoid taxes if it is such a good deal they should hold tight for themselves?

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Explain a conservation easement to me.

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Basically exactly what the OP is describing but by a different name.

Too good to be true tax scheme that has been blown to smithereens by the IRS recently.

Sounds like it will work great until it doesn't and then you'll have a lot of explaining to do to the IRS.

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Basically exactly what the OP is describing but by a different name.

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I think that was Weagle’s point. He was asking OP to describe a conversation easement to prove to OP it is exactly what he described in his first post.

I’ll reiterate that question to the OP. How is what you’ve described/your CPA is pitching different from a conversation easement? I don’t see any differences. But the more important question is would the IRS?

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He pinged me today- I’m going to ask him this exact question and report.

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My suspicion is that he will say a bunch of gibberish that basically means they just have a different name.

In fact, if you look into fee simple donations, you’ll find many CPA blogs and newsletters that basically say “since the IRS has cracked down on conservation easements, we do these now instead.”

What they don’t say is the hundreds of thousands of dollars people who tried them are now paying back, plus interest. I have a client who was warned not to do it by his CPA but did it anyway, and 5 years later he’s on the hook for over $500,000.

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I think that was Weagle’s point. He was asking OP to describe a conversation easement to prove to OP it is exactly what he described in his first post.

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Nailed it.

1. I buy land.
2. Sell shares in land.
3. Get an appraiser to say it’s worth way more than I paid.
4. Give land away.

5. Prepare to hear theses words, “will the defendant please rise” and “how to you plea to the charges.”

Also, “you want some chocolate, boyfriend?”