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Andrea McCarthy

The Tenuous Future of Façade Easements: Facing the Loss of the Greatest Preservation Tool

           In 1976, Congress passed a Tax Reform Act that allowed for a deduction on federal income taxes for contributions of certified historic structures to a qualified holding organization: entitled façade easements.  Over the next twenty years there were few façade easement donations given, but in the past few years there has been a rise in interest.  Non-profit holding organizations have recognized easements as a strong preservation mechanism that generates revenue while providing a strong economic incentive to the donor.  Unfortunately, as of late, there have been abuses of the valuations of the easement for tax purposes.  Congress and the Internal Revenue Service have decided to take major steps in rectifying this situation.  In January of 2005, the Joint Committee on Taxation of Congress recognized the problems with the ambiguous and oft incorrect valuations.  The most drastic recommendation made is to halt the tax breaks for the donation of historic structures.  If Congress follows this recommendation, the preservation community will lose one of the strongest preservation tools available.            

         This thesis will study the recent interest in easements by both non-profit organizations and taxpayers.  Also, it will discuss the problems affecting easements including valuation methods, appraiser and non-profit abuses, and the inappropriate motivations of donors.  Finally, recommendations will be made as to how to correct the current system while maintaining the easement as an option for preservationists.

           Andrea McCarthy received her BA in History and Art History from the University of Notre Dame in 1999.  Andrea has worked for the Snite Museum at the University of Notre Dame, the Terra Museum of American Art in Chicago, Christie’s Auction House in Manhattan and, while at SAIC, as an intern with the Landmarks Preservation Council of Illinois.


Thesis Advisor: Richard Friedman, Adjunct Professor, Historic Preservation; partner, Neal, Murdock & Leroy, LLC, Chicago

Thesis Reader: Richard Roddewig

Second Reader: Lauren Gatti




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