FAMILY VACATION HOMES: PLANNING WITH QUALIFIED CONSERVATION CONTRIBUTIONS

By Nancy G. Henderson, Esq. and Kristen E. Caverly, Esq.^*

In Part I of this article, published in the Fall issue of the Quarterly, the authors discussed various options available to vacation-home owners who wish to pass property to children or other family members. This article addresses the challenges presented by a particularly Byzantine, statute-driven method: preserving vacation property through use of a qualified conservation contribution ("QCC").

In appropriate circumstances, a donor may make a QCC to a qualified charity and obtain tax benefits sufficient to prevent the forced sale of a cherished property, thereby preserving the property for the use and enjoyment of future generations. The following is the overview of the perceived abuses of QCCs and how recent negative attention from the IRS and Congress may affect the future of QCCs as a tax-planning tool.

I. LIFETIME GIFT OF QUALIFIED CONSERVATION CONTRIBUTION