Charitable Conservation Easement Program Integrity Act of 2020

II 116TH CONGRESS 2D SESSION S. 4751 To amend the Internal Revenue Code of 1986 to limit the charitable deduction for certain qualified conservation contributions. IN THE SENATE OF THE UNITED STATES SEPTEMBER 29, 2020 Mr. DAINES (for himself, Mr. GRASSLEY, and Mr. ROBERTS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to limit the charitable deduction for certain qualified conservation contributions. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Charitable Conserva- 4 tion Easement Program Integrity Act of 2020’’. 5 VerDate Sep 11 2014 03:27 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4751.IS S4751 kjohnson on DSK79L0C42PROD with BILLS 2 •S 4751 IS SEC. 2. LIMITATION ON DEDUCTION FOR QUALIFIED CON- 1 SERVATION CONTRIBUTIONS MADE BY PASS- 2 THROUGH ENTITY. 3 (a) IN GENERAL.—Section 170(h) of the Internal 4 Revenue Code of 1986 is amended by adding at the end 5 the following new paragraph: 6 ‘‘(7) LIMITATION ON DEDUCTION FOR QUALI- 7 FIED CONSERVATION CONTRIBUTIONS MADE BY 8 PASS-THROUGH ENTITY.— 9 ‘‘(A) IN GENERAL.—In the case of any 10 qualified conservation contribution of any part- 11 nership, no amount of such contribution may be 12 taken into account under this section by any 13 partner of such partnership as a distributive 14 share of such contribution if the aggregate 15 amount so taken into account by such partner 16 for the taxable year would (but for this para- 17 graph) exceed 2.5 times the portion of the ad- 18 justed basis of such partner’s interest in such 19 partnership (determined immediately before 20 such contribution and without regard to section 21 752) which is allocable (under rules similar to 22 the rules of section 755) to the qualified real 23 property interest with respect to which such 24 contribution is made. 25 VerDate Sep 11 2014 03:27 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4751.IS S4751 kjohnson on DSK79L0C42PROD with BILLS 3 •S 4751 IS ‘‘(B) LIMITATION TO FIRST-TIER PART- 1 NERSHIPS.—Except as may be otherwise pro- 2 vided by the Secretary, no distributive share of 3 a qualified conservation contribution shall be 4 taken into account under this section if the in- 5 terest in the partnership making the contribu- 6 tion is held through one or more partnerships 7 or pass-through entities. 8 ‘‘(C) EXCEPTION FOR CONTRIBUTIONS 9 OUTSIDE 3-YEAR HOLDING PERIOD.—Subpara- 10 graphs (A) and (B) shall not apply to a part- 11 ner’s distributive share of a qualified conserva- 12 tion contribution if such contribution is made— 13 ‘‘(i) at least 3 years after the date the 14 partnership acquired the entirety of the 15 qualified real property interest with respect 16 to which such contribution is made, and 17 ‘‘(ii) at least 3 years after the date 18 the partner acquired the partner’s entire 19 interest in the partnership with respect to 20 which such distributive share is determined 21 (including, for purposes of subparagraph 22 (B), any such interest held through one or 23 more partnerships or pass-through enti- 24 ties). 25 VerDate Sep 11 2014 03:27 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4751.IS S4751 kjohnson on DSK79L0C42PROD with BILLS 4 •S 4751 IS ‘‘(D) EXCEPTION FOR FAMILY PARTNER- 1 SHIPS.—This paragraph shall not apply with 2 respect to any partnership if substantially all of 3 the partnership interests in such partnership 4 are held by individuals who are related within 5 the meaning of section 152(d)(2). 6 ‘‘(E) APPLICATION TO OTHER PASS- 7 THROUGH ENTITIES.—Except as may be other- 8 wise provided by the Secretary, rules similar to 9 the rules of this paragraph shall apply with re- 10 spect to qualified conservation contributions of 11 S corporations and other pass-through entities. 12 ‘‘(F) REGULATIONS.—The Secretary shall 13 prescribe such regulations or other guidance as 14 may be necessary to carry out, and prevent the 15 avoidance of, the purposes of this paragraph.’’. 16 (b) EFFECTIVE DATE.— 17 (1) IN GENERAL.—Except as otherwise pro- 18 vided in paragraph (2), this section shall apply to 19 contributions made in taxable years ending after De- 20 cember 23, 2016. No inference is intended as to the 21 appropriate treatment of contributions made in tax- 22 able years ending on or before such date or as to 23 any activity not described in section 170(h)(7) of the 24 VerDate Sep 11 2014 03:27 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4751.IS S4751 kjohnson on DSK79L0C42PROD with BILLS 5 •S 4751 IS Internal Revenue Code of 1986, as added by this 1 section. 2 (2) LIMITATION TO FIRST-TIER PARTNER- 3 SHIPS.—Subparagraph (B) of section 170(h)(7) of 4 the Internal Revenue Code of 1986, as added by this 5 section, shall apply to contributions made after the 6 date of the enactment of this Act. 7 Æ VerDate Sep 11 2014 03:27 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S4751.IS S4751 kjohnson on DSK79L0C42PROD with BILLS