The Internal Revenue Code encourages owners of buildings listed on the National Register of Historic Places to protect them by donating façade easements to charities dedicated to the preservation of our built environment. The building owner is permitted to claim a charitable contribution deduction equal to the value of the easement. A façade easement is an agreement between the building owner and the charity restricting the ability of the building owner to make changes to the building’s façade. Additionally, the façade easement may require the building owner to maintain the building in a specified condition. This article discusses the impact of that agreement on the tax consequences of the building owner’s maintenance costs. Because the general rule imposes the obligation to repair property subject to an easement on the easement holder, this article concludes that current law supports the allowance of additional charitable contribution deductions as maintenance costs are incurred.
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