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§ 9.7 REAL PROPERTY USED FOR CONSERVATION PURPOSESevent of the early disposition of the property attributed to the qualified rehabilitationexpenditures.” 202 Consequently, this rule was announced: “When a qualifiedreal property interest is donated for conservation purposes, the basis of thedonor’s remaining property is adjusted by eliminating that part of the total basisof the property that is properly allocable to the donated qualified real propertyinterest”; hence, the donor must recapture a portion of the rehabilitation taxcredit. 203The IRS published its stance in this regard in 1989. 204 The court wrote that itagreed with the IRS position, “not because we rely upon it for authority, butbecause we have independently arrived at the same conclusion.” 205(h) Donative IntentA court ruled that a gift of a scenic easement was a transfer of value to the charitablerecipient, despite a variety of restrictions imposed by the donors, but alsoheld that the donors’ motivation for making the gift must be subsequentlyexplored. 206 The issues in the case related to a contribution to a conservancyorganization of a scenic easement over approximately 170 acres of the donors’real property. The IRS, in challenging the tax deductions claimed for this gift,asserted that there was no true gift, because the donors reserved numerousrights in the scenic easement property, and also that they lacked the requisitedonative intent and exclusive conservation purpose when they conveyed thescenic easement.Because of the reservation of certain rights, the IRS contended that thedonors retained dominion and control over the easement property and thustransferred nothing of value to the charitable organization. The court, however,ruled that some of these restrictions enabled the recipient charity to “adequatelypreserve the scenic quality of the easement property.” 207 Thus, the court heldthat the donors transferred “value” to the conservancy organization through thescenic easement conveyance and concluded that the easement placed materialrestrictions on the donors’ use of the property, as required by the law. 208The issue the court declined to resolve at the time was that of the donors’intent in making the contribution. The court observed that, in general, the taxlaw “permits charitable deductions for bona fide gifts irrespective of a taxpayer’smotivations.” 209 But, the court added, a donor “must not expect a substantialbenefit as a quid pro quo for the transfer.” 210 To this end, then, courts willbe looking at the “external features” 211 of a transaction.202 Id. at 706.203 Id.204 Rev. Rul. 89-90, 1989-2 C.B. 3.205 Rome I Ltd. v. Commissioner, 96 T.C. 697, 707 (1991). Cf. Gen. Couns. Mem. 39664, in which the IRS tookthe position that recapture of a rehabilitation tax credit under these circumstances was not required.206 McLennan v. United States, 91-1 U.S.T.C. 50, 230 (Cl. Ct.); 91-2 U.S.T.C. 50,447 (Ct. Cl. 1991).207 Id., 91-1 U.S.T.C. 50,230, at 87,925.208 Reg. § 1.170A-7(b)(1)(ii).209 McLennan v. United States, 91-1 U.S.T.C. 50,230 (Ct. Cl. 1991), at 87,926.210 Id.211 Id. 293