Broker-dealers and sales agents may have been improperly recommended investments in syndicated conservation easement transactions.
Sonn Law Group is representing Orange Stone Group, LLC investors who have suffered losses in conservation easements. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.
Broker-dealers and sales agents may have improperly recommended investments in conservation easements in Orange Stone Group, LLC to investors. The IRS and Department of Treasury refer to these investments as “syndicating conservation easement transactions” that purport to give investors the opportunity to obtain charitable deductions in amounts that significantly exceed the amount invested.
The process is described as the following: The investor purchases an interest directly or indirectly in a pass-through entity that holds real property (like Orange Stone Group). The entity that holds the real property contributes a conservation easement encumbering the property to a tax-exempt entity and allocates, directly or through one or more tiers of the pass-through entities, a charitable contribution deduction to the investor. Then the investor reports on his or her federal income tax return a charitable contribution deduction with respect to the conservation easement.
The IRS warned that if the charitable contribution deduction equals or exceeds two and one-half times the amount of the investor’s investment, the IRS plans to challenge the purported tax benefits based on the overvaluation of the conservation easement.
Since 2019, the IRS has been increasing enforcement actions for syndicated conservation easement transactions and stated that the area is a priority for the agency. The agency stated that the transactions undermine the public’s trust in tax incentives for private land conservation and tax compliance itself. A December 2019 court opinion out of Washington, DC disallowed a conservation easement deduction and deemed penalties applicable.
A Form-D was filed by Orange Stone Group, LLC to raise capital from investors with a total offering amount of $4,296,814. The minimum amount accepted by any outside investor was $25,000.
Contact Sonn Law to Discuss Recovery Options
If you invested in Orange Stone Group, LLC and took a charitable contribution deduction worth at least two and a half times your investment, Sonn Law Group may be able to help. Please call us now at 866-827-3202 or complete our contact form.