Near the middle of the French Quarter in New Orleans is a three and a half story masonry house with an attached three-story slave quarter. The owner donated the facade to a historic organization for conservation purposes. This means the organization must approve any changes. The owner kept the rest of the building and claimed a charitable deduction of $46,000.

What a facade, cried the IRS.

A court allowed $7,500, the house's decrease in value because of the gift.

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William and Jo Ann Akers granted a 30-year easement on 1,343 acres in Cheatham County to the Tennessee Conservation League. The easement provided for the conservation and protection of the property's natural environment. This created a host of restrictions, including prohibiting dumping trash and requiring league approval for excavations, buildings and plantings. Buyers would have to abide by the stringent restrictions, which means they could use the property only for secluded recreational retreats.

Though the couple still owned the land, they claimed they were entitled to a deduction of $789,000. The IRS took a more conservative view. Its appraiser said the gift was worthless. He said the restrictions didn't cause the property's value to decrease.

The court disagreed. It said the league had rights over the property it didn't have before, which decreased the land value by $114,000. It allowed this amount as a deduction.

Here the donor gave rights over his land, but retained the title. In another case the donor reversed the process. He gave the land, but reserved a right to use it for a specific purpose. The landowner donated 800 acres of land to the United States; but reserved the right to train his hunting dog on it. The IRS allowed a deduction for the total land value. It considered the reserved right inconsequential. (more at Charitable Contributions)