§1213. Reform of charitable contributions of certain easements in registered historic districts and reduced deduction for portion of qualified conservation contribution attributable to rehabilitation credit

Pension Protection Act of 2006

Title XII Provisions Relating to Exempt Organizations

Subtitle B Reforming Exempt Organizations

Part 1 General Reforms

(a) SPECIAL RULES WITH RESPECT TO BUILDINGS IN REGISTERED HISTORIC DISTRICTS.-

(a)(1) IN GENERAL.-Paragraph (4) of section 170(h) (relating to definition of conservation purpose) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:

"(B) SPECIAL RULES WITH RESPECT TO BUILDINGS IN REGISTERED HISTORIC DISTRICTS.-In the case of any contribution of a qualified real property interest which is a restriction with respect to the exterior of a building described in subparagraph (C)(ii), such contribution shall not be considered to be exclusively for conservation purposes unless-

"( i) such interest-

"(I) includes a restriction which preserves the entire exterior of the building (including the front, sides, rear, and height of the building), and

"(II) prohibits any change in the exterior of the building which is inconsistent with the historical character of such exterior,

"(ii) the donor and donee enter into a written agreement certifying, under penalty of perjury, that the donee-

"(I) is a qualified organization (as defined in paragraph (3)) with a purpose of environmental protection, land conservation, open space preservation, or historic preservation, and

"(II) has the resources to manage and enforce the restriction and a commitment to do so, and

"(iii) in the case of any contribution made in a taxable year beginning after the date of the enactment of this subparagraph, the taxpayer includes with the taxpayer's return for the taxable year of the contribution-

"(I) a qualified appraisal (within the meaning of subsection (f )(11)(E)) of the qualified property interest,

"(II) photographs of the entire exterior of the building, and

"(III) a description of all restrictions on the development of the building.".

(b) DISALLOWANCE OF DEDUCTION FOR STRUCTURES AND LAND IN REGISTERED HISTORIC DISTRICTS.-Subparagraph (C) of section 170(h)(4), as redesignated by subsection (a), is amended-

(b)(1) by striking "any building, structure, or land area which",

(b)(2) by inserting "any building, structure, or land area which" before "is listed" in clause ( i), and

(b)(3) by inserting "any building which" before "is located" in clause (ii).

(c) FILING FEE FOR CERTAIN CONTRIBUTIONS.-Subsection (f) of section 170 (relating to disallowance of deduction in certain cases and special rules) is amended by adding at the end the following new paragraph:

"(13) CONTRIBUTIONS OF CERTAIN INTERESTS IN BUILDINGS LOCATED IN REGISTERED HISTORIC DISTRICTS.-

"(A) IN GENERAL.-No deduction shall be allowed with respect to any contribution described in subparagraph (B) unless the taxpayer includes with the return for the taxable year of the contribution a $500 filing fee.

"(B) CONTRIBUTION DESCRIBED.-A contribution is described in this subparagraph if such contribution is a qualified conservation contribution (as defined in subsection (h)) which is a restriction with respect to the exterior of a building described in subsection (h)(4)(C)(ii) and for which a deduction is claimed in excess of $10,000.

"(C) DEDICATION OF FEE.-Any fee collected under this paragraph shall be used for the enforcement of the provisions of subsection (h). ".

(d) REDUCED DEDUCTION FOR PORTION OF QUALIFIED CONSERVATION CONTRIBUTION ATTRIBUTABLE TO THE REHABILITATION CREDIT.-Subsection (f) of section 170, as amended by subsection (c), is amended by adding at the end the following new paragraph:

"(14) REDUCTION FOR AMOUNTS ATTRIBUTABLE TO REHABILITATION CREDIT.-In the case of any qualified conservation contribution (as defined in subsection (h)), the amount of the deduction allowed under this section shall be reduced by an amount which bears the same ratio to the fair market value of the contribution as-

"(A) the sum of the credits allowed to the taxpayer under section 47 for the 5 preceding taxable years with respect to any building which is a part of such contribution, bears to

"(B) the fair market value of the building on the date of the contribution.".

(e) EFFECTIVE DATES.-

(e)(1) SPECIAL RULES FOR BUILDINGS IN REGISTERED HISTORIC DISTRICTS.- The amendments made by subsection (a) shall apply to contributions made after July 25, 2006.

(e)(2) DISALLOWANCE OF DEDUCTION FOR STRUCTURES AND LAND; REDUCTION FOR REHABILITATION CREDIT.- The amendments made by subsections (b) and (d) shall apply to contributions made after the date of the enactment of this Act.

(e)(3) FILING FEE.- The amendment made by subsection (c) shall apply to contributions made 180 days after the date of the enactment of this Act.