Taxpayers who claimed a $3 million charitable contribution deduction for filing a land preservation easement to restrict development on their property have been denied a charitable contribution deduction and have been ordered to pay a “substantial understatement of income tax” penalty by the Tax Court. David and Barbara Costello owned about 73 acres of land in Howard County, Maryland. The County operated an Agricultural Land Preservation Program under which owners of eligible property could impose a development restriction and sell the development rights to a third party. After offering to sell the restriction to the County without success, they ultimately sold the rights to a developer in...