STATE OF COLORADO
DEPARTMENT OF REVENUE
TAX GROUP
Department of Revenue								

1375 Sherman Street
5th Floor Suite 504
Denver, CO 80203

Bill Owens
Governor

M. Michael Cooke
Executive Director

COLORADO DEPARTMENT OF REVENUE
STATEMENT OF BASIS AND PURPOSE
Re: Regulation 39-22-522 - Gross Conservation Easement Credit
(1 CCR 201-2 Income Tax)

Basis:
The statutory basis for this regulation is §39-21-112 (1) and §39-22-522, C.R.S.  

Purpose:
In 2005, the legislature created a “tax matters representative” or TMR in cases involving transferees of the gross conservation easement credit.  The TMR is similar to the tax matters partner concept used by the Internal Revenue Service.  The amendment also adopts procedures similar to those used by the Internal Revenue Service for tax matters partner, including use of a “transfer item,” revoking or otherwise changing the designation of the tax matter representative, and other procedural matters.  The amendment implements amendments to the statute regarding the date by which a transfer of the credit must occur and how the credit is handled by the estate of a taxpayer who held a credit.

Specifically, the following changes were made to implement House Bill 05-1244 concerning the Tax Matter Representative and related matters:
•	Tax Matters Representative and Representation.  See, subsection (3)(j)(I).
•	Transferees.  See, subsection (3)(j)(I)(1).
•	Hearing Requests and Notification.  See, subsection (3)(j)(I)(3).
•	Credit Transfer Items and Effective Dates.  See, subsection (3)(j)(II) and (III).
•	Revocation Status.  See, subsection (3)(j)(IV).
•	Criteria for Representation.  See, subsection (3)(j)(V).
•	Statute of Limitations.  See, subsection (3)(j)(VI).
•	Taxpayer election of abandonment of a credit.  See, subsection (6)(c).

The amendment also implements changes made by the legislature in 2006 relating to the amount of credit that is allowed per donation.  See, House Bill 06-1354.  Specifically, the amendment to this regulation enacts changes pertaining to:
•	Taxpayers qualified claiming the credit, donations made on or after January 1, 2007.  See, subsection (2)(c).
•	Transfer timing (prior to June 7, 2005 and on or after June 7, 2005).  See, subsection (3)(e).

Finally, the amendment further clarifies the language regarding a credit held by tenants in common, joint tenants, and other similar ownership groups (“tenants”).  Specifically, that tenants, as owners of an undivided interest in the property, are subject to the limitation of one credit per donation. See, subsection (1)(b).