Partnerships could settle open conservation donation tax disputes

An eligible partnership could elect to settle federal tax issues tied to certain conservation donations. The option covers partnership contributions claimed for tax years ending on or before December 31, 2025, when the tax assessment period remains open or a review, appeal, or court case is pending. The partnership must file the required statement and remit the required settlement amount with it; if partners fail to provide their shares, the partnership’s remittance is reduced by those shares, and those partners may be assessed directly. The allowed deduction would be the lower of the claimed amount or a limit based on partner contributions: generally 2.5 times those contributions, or 3.2 times for specified contributions, excluding certain organizer-related financing. Payment generally resolves federal tax liability tied to the deduction above the limit, and the election waives challenges to stated amounts. A partnership may seek review of computational corrections, but not the donation’s value or other issues resolved by the election. The partnership would have 360 days after enactment to file and pay. A qualifying election would take effect upon filing.

Certain buildings would count as contributing buildings under specified conservation donation and historic rehabilitation tax rules. The definition applies to specified tax rules for conservation donations involving historic districts and to related historic rehabilitation tax rules. Official district records must identify the building as contributing, or the Interior Secretary must certify that it contributes to the district’s historic significance. The conservation donation provision would apply to open tax years, eligible refund claims, related deduction carryovers, and pending cases. The rehabilitation tax provisions would apply to tax years beginning after enactment.