But the flap should be fodder for Congress’s periodic reviews of the law, especially given that the Internal Revenue Service has listed the deduction among its “Dirty Dozen tax scams.”
In theory, the donation of an easement, which bars a homeowner from making modifications without consent of the easement holder, can promote good stewardship of a historic property. The deduction encourages homeowners to take on a burden that can benefit a whole neighborhood by helping to protect its unique character. This could be especially important in towns such as Cohasset, where an old-fashioned coastal New England atmosphere is a critical economic driver.
But Gomez’s home was already part of the Cohasset Common Historic District, which limits the ways in which owners can modify their homes. Gomez took on additional restrictions in his deal with the Trust for Architectural Easements. An appraiser recommended by the trust claimed that Gomez’s concessions were worth the fat deduction he took off from his taxes.
The trust, which owns easements in 27 Massachusetts communities, notes that Cohasset bylaws only cover the portion of a facade visible from the street, whereas Gomez’s donation restricts modification to any portion of his home’s exterior. Yet the trust went on to allow Gomez to modify the rear of his home. The trust’s actions invite the question of whether it is truly committed to preservation, as opposed to enabling deductions in exchange for the payments it collects from donors.
Encouraging the owners of homes with unique characteristics to agree to keep their homes in their original state, in exchange for a tax deduction, can be an effective tool to promote preservation. But allowing such generous deductions on properties that are already subject to restrictions — and then doing so through trusts that don’t insist on full preservation — is a waste of taxpayer money.