A developer acquired a parcel of unimproved real property that she would like to develop. Although the land is currently zoned for commercial use, the developer would prefer not to begin development until an adjoining city street is widened. With a wider street, her development can include a landscaped public entrance and lighting. Without the widening, the development will have only one entrance that is neither as accessible nor as attractive.
The city plans to widen the street in order to build bike paths which are now required in its new city plan. It will be easier for the city to widen the street if it acquires an easement across the developer's property. The developer is interested in providing this easement to the city. However, before she acts, she would like assurance that she will receive a charitable deduction for the value of the easement. She has asked you to request a letter ruling on this matter.
a. Do the Treasury regulations provide further guidance in this situation?
b. Do the Treasury regulations help to refine or add to the initial research question?
c. Do the regulations adequately address the research question? If so, what are your conclusions, and on what are they based?