Façade easement fails perpetuity test

The Tax Court has denied a charitable contribution deduction for the gift of a façade easement on property subject to a prior mortgage.  The Court said that the easement might not be enforceable in perpetuity.

Taxpayers granted an easement to the National Architectural Trust restricting the use of a residential property located in an historic preservation district in Boston.  The property was subject to a prior mortgage.  They claimed a charitable contribution deduction totaling about $220,000 over two years.