Riddle Aggregates, LLC, Ornstein-Schuler, LLC, Tax Matters Partner

United States Tax Court T.C. Memo. 2026-117 RIDDLE AGGREGATES, LLC, ORNSTEIN-SCHULER, LLC, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent __________ Docket No. 31104-21. Filed November 10, 2026. __________ Maxwell W. Brown, Michael B. Coverstone, Merima Mahmutbegovic, Jay R. Nanavati, Macdonald A. Norman, Daniel A. Rosen, Andrew W. Steigleder, Andrew M. Weiner, Michael Todd Welty, and Daniel B. Wharton, for petitioner. Stephen A. Haller, Peter J. Kuylen, Christopher A. Pavilonis, Randi N. Raj, and H. Barton Thomas, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION KERRIGAN, Judge: This case is a partnership-level proceeding under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. No. 97-248, §§ 401–407, 96 Stat. 324, 648–71, 1 involving syndicated conservation easement (SCE) donations. This SCE case is one of 14 cases involving charitable contribution deductions claimed for the donation of conservation easements and/or 1 Before its repeal, TEFRA governed the tax treatment and audit process for many partnerships, including Riddle Aggregates, LLC (Riddle). Served 11/10/26  2 [*2] fee simple interests mostly in Morgan County, Alabama. 2 Eight of the 14 cases, including this case, relate to the donation of conservation easements on, and/or fee simple interests in, land Freeman Five, LLC (Freeman Five), formerly owned. We set this case for trial as a test case for the Freeman Five cases. After the trial was set, the parties in each of the six non-Freeman Five cases also filed a stipulation to be bound in which the parties agree that those cases will be resolved consistently with the outcome of this case. The partnership in this case is Riddle Aggregates, LLC (Riddle). Riddle’s tax matters partner is petitioner, Ornstein-Schuler, LLC (OS LLC). 3 On its Form 1065, U.S. Return of Partnership Income, for the period beginning December 6 and ending December 31, 2017, Riddle reported a charitable contribution of $44,995,000 related to a donated conservation easement and a charitable contribution of $355,000 related to a donated fee simple interest. Riddle claimed noncash charitable contribution deductions for these amounts. On August 23, 2021, respondent issued a Notice of Final Partnership Administrative Adjustment (FPAA) to Riddle. In the FPAA respondent disallowed the entire conservation easement contribution deduction and $10,000 of the fee simple deduction under section 170, 4 and asserted penalties. After the parties filed Stipulations of Settled Issues, 5 the remaining issues for consideration are (1) the fair market value of the 2 Kellum Resources, LLC v. Commissioner, No. 2585-23 (T.C. filed Mar. 3, 2023), is the only case where the property is not in Morgan County, Alabama. 3 Throughout the Opinion, we refer to OS LLC both as petitioner and as OS LLC. We generally refer to “petitioner” when OS LLC’s position as the tax matters partner of Riddle is of particular import to the discussion. We generally refer to “OS LLC” when the principal focus of the discussion is on OS LLC’s actions outside of these proceedings. 4 Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C. (Code), in effect at all relevant times, regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure. All monetary amounts are rounded to the nearest dollar. 5 In the Stipulation of Settled Issues filed September 19, 2025, the parties agreed that (1) each of the real property interests at issue in this case is a qualified conservation contribution as that term is defined in section 170(h) and inclusive of paragraphs (1) through (5); and that (2) Riddle met the substantiation requirements under section 170(f)(8) for its donation of the conservation and fee simple interest. Additionally, respondent conceded that (1) the section 6663 fraud penalty does not apply for the taxable year ending December 31, 2017, inclusive of the partnership adjustments in the FPAA issued to petitioner on August 23, 2021; and that (2) the section 6662A reportable transaction understatement penalty does not apply for the  3 [*3] conservation easement and (2) whether the accuracy-related penalty under section 6662 applies. FINDINGS OF FACT Some of the facts are stipulated and so found. The Stipulations of Facts and the attached Exhibits are incorporated herein by this reference. Riddle is a limited liability company with its principal place of business in Alabama. It is treated as a partnership for federal tax purposes and is subject to the audit procedures of TEFRA. Petitioner, Riddle’s tax matters partner, had its principal place of business in Georgia when the Petition was timely filed. The parties agree that appeal of this case would lie to the U.S. Court of Appeals for the Eleventh Circuit. See § 7482(b)(1)(E). I. History and Characteristics of the Property at Issue A. The Riddle Property On May 8, 2006, Freeman Five acquired approximately 2,744.30 acres of land in Morgan County (Freeman Five Parent Tract). The consideration listed on the corporation warranty deed conveying the Freeman Five Parent Tract to Freeman Five was $10. The conservation easement was granted on a 231.22 acre tract (Riddle Property) that was originally part of the Freeman Five Parent Tract. taxable year ending December 31, 2017, inclusive of the partnership adjustments in the FPAA. The parties further stipulated that all other penalty adjustments in the FPAA remained at issue. In the second Stipulation of Settled Issues, filed December 8, 2025, the parties agreed that (1) Riddle is entitled to a deduction under section 170 for the donation of the conservation easement; (2) Riddle is entitled to a deduction under section 170 for the donation of the fee simple interest; and that (3) section 170(e) does not apply to limit any charitable contribution deduction that may be allowed to Riddle in this case. In the third Stipulation of Settled Issues, filed August 26, 2026, the parties agreed that (1) the fair market value of the Riddle Property after the conservation easement was granted on December 8, 2017, was $345,000 and that (2) respondent does not assert the application of an accuracy-related penalty pursuant to section 6662(a), (c), (d), (e), and (h) to the adjustment of $10,000 for the after value in the FPAA dated August 23, 2021.  4 [*4] Morgan County, Alabama, is in the Huntsville-Decatur- Albertville Combined Statistical Area. In 2017 the population of Morgan County was approximately 120,000. Decatur, Hartselle, and Huntsville are the major cities in Morgan County, although most of the population of Huntsville lives in Madison County, which is northeast of Morgan County. Marshall County is immediately east of the Riddle Property, Cullman and Blount Counties are south, and Limestone County is northwest. Joshua Rains is the chief appraiser for Morgan County. He produced records of land sales of more than 50 acres in Morgan County between October 1, 2014, and September 30, 2019. Of the 28 sales of more than 50 acres of vacant land, the highest sale price was $21,934 per acre, which was for a parcel of land purchased by the city of Decatur as a site for a new high school. The sale prices of the remaining 27 land sales ranged from $1,458 to $11,089 per acre. Part of the Riddle Property was historically farmed, but the portion of the Riddle Property suitable for farmland was fallow as of the retrospective date of valuation. There is no evidence in the record that the Riddle Property was historically used for mining. B. Limestone Mining in Northern Alabama Limestone aggregate is used in construction. The U.S. Geological Survey defines the construction aggregates industry as those companies that mine and process crushed stone and/or construction sand and gravel. The Alabama Department of Transportation (ALDOT) provides specifications to determine the quality of quarried materials for construction aggregate. Aggregates are generally produced close to where they are consumed because transportation costs play a large part in the price of aggregates delivered. The Alabama Department of Labor (ALDOL) releases annual reports that detail the production of minerals, including limestone. Morgan County represented about 6.25% of the average total limestone production in Alabama between 2013 and 2017. There were no pits for any other mineral operating in Morgan County between 2013 and 2017.  5 [*5] II. Individuals and Entities Involved A. OSI and OSI-Affiliated Entities Matthew Ornstein and Frank A. Schuler IV are promoters of SCEs. 6 As part of their business ventures, Messrs. Ornstein and Schuler created or directed the creation of many limited liability companies, including petitioner, to effect their SCE transactions. For the purposes of this Opinion, we will refer to such entities as OSI- affiliated entities when relevant, and we will refer to Messrs. Ornstein and Schuler, OSI-affiliated entities, and their relevant employees collectively as OSI unless it is necessary to specifically reference a particular entity or individual. B. Riddle Aggregates, LLC Riddle was an OSI-affiliated entity formed by Matthew Kaynard, an employee of petitioner, on August 16, 2016. Riddle served as the property-owning entity in the SCE transaction. C. Riddle Aggregates Group Mr. Kaynard formed Riddle Aggregates Group (RAG), another OSI-affiliated entity, on August 17, 2016. RAG served as the investment company in the SCE transaction, meaning it was the entity used to raise funds from outside investors. D. Freeman Five Freeman Five was organized in the State of Georgia in December 2002. For the taxable year ended December 31, 2017, Freeman Five had seven members, who each held between 1% and 19% membership interests. James Freeman Sr. was the manager of Freeman Five in 2017. Mr. Freeman established Freeman Five to hold real estate. He was an experienced and knowledgeable real estate trader who had conducted over 50 real estate transactions during his lifetime. Freeman 6 “Promoter” is sometimes viewed as a loaded term in the tax world because of the penalty imposed by section 6700(a) for “[p]romoting abusive tax shelters.” In this Opinion we use the term “promoter” in its ordinary sense, making no determination as to whether the activities of Messrs. Ornstein and Schuler, or of the entities they managed, would subject them to a civil penalty under section 6700(a), a question that is not before us.  6 [*6] Five was the landholder of the Riddle Property before the SCE transaction. III. Ornstein-Schuler’s Acquisitions of Freeman Five Properties In 2016 Freeman Five solicited the assistance of Duke Baker Woller Land Co. to sell the Freeman Five Parent Tract. At this time Freeman Five was not under any financial strain. Longleaf Ventures, LLC (Longleaf), an OSI-affiliated entity controlled by petitioner, submitted to Duke Baker Woller Land Co. a letter of intent dated March 20, 2017, to purchase approximately 894 acres of the Freeman Five Parent Tract for $2,500 per acre. Longleaf was not related to Freeman Five. Longleaf submitted a separate letter of intent dated April 11, 2017, to Duke Baker Woller Land Co. to purchase approximately 557 additional acres of the Freeman Five Parent Tract for $2,500 per acre. As part of the Longleaf purchase transactions, Freeman Five subdivided the Freeman Five Parent Tract. A certificate to subdivide recorded September 6, 2017, in the Morgan County deed records shows the Freeman Five Parent Tract divided into seven tracts as follows: Tract Number Acres One 339.85 Two 231.22 Three 309.49 Four 149.38 Five 175.98 Six 250.31 Seven 1288.28 Riddle came to own the 231.22-acre Tract Two, the Riddle Property, after a series of transactions. Pursuant to a Membership Interest and Purchase Agreement dated September 12, 2017, Freeman Five agreed to contribute Tracts One, Two, and Three to Quorum Holdings, LLC (Quorum Holdings), in exchange for a 100% interest in Quorum Holdings. Mr. Kaynard formed Quorum Holdings, an OSI- affiliated entity. Pursuant to the same agreement, the members of Freeman Five then sold 98% of their partnership interests in Quorum Holdings to Longleaf for $2,236,175. The real estate sales validation  7 [*7] form filed in connection with the transfer of the 880.56 acres of Tracts One, Two, and Three, recorded on September 18, 2017, lists the combined value of those tracts as $2,236,175. Quorum Holdings conveyed the Riddle Property to Riddle via statutory warranty deed, recorded on October 13, 2017, for 100% of the partnership interests in Riddle. The real estate sales validation form filed in connection with the transfer of the Riddle Property lists the value of the 231.22 acres of the Riddle Property as $613,440. On October 13, 2017, Quorum Holdings distributed its interests in Riddle pro rata to its members, so that Longleaf owned 98% of Riddle and the members of Freeman Five owned 2% of Riddle. On the same day Longleaf distributed its 98% interest in Riddle to its members, OS LLC, Workout, LLC, New Rapids Land, LLC, Schuler Investments, LLC, and Turtle Bluff, LLC. IV. Appraisal of the Riddle Property While the discussions and steps of the ownership transfers were ongoing, various reports regarding the Riddle Property were completed. On June 1, 2017, Longleaf engaged ECS Southeast LP (ECS) to conduct a geotechnical exploration and environmental assessment of the Riddle Property. ECS performed two exploratory borings with rock coring on the Riddle Property and prepared a field log with information about the rock core samples. ECS performed laboratory testing on selected representative rock core samples from the borings to evaluate pertinent chemical composition and engineering properties. After taking two rock cores and testing one sample from each rock core, ECS issued a report (ECS Report) of geotechnical exploration and rock testing to Riddle on August 7, 2017. The ECS Report showed the subject site is underlain by bedrock of the Bangor limestone formation and the Pottsville formation is also present. For the Bangor Limestone formation, the primary rock is limestone. For the Pottsville formation, the primary rock is sandstone. Next, ECS issued a Phase 1 Environmental Site Assessment of the Riddle Property on August 29, 2017. On October 13, 2017, Riddle entered into a consulting agreement with Galt Mining Investments, LLC, another OSI-affiliated entity. Galt Mining Investments engaged Blethen Mine Consultants, LLC (Blethen), to analyze the feasibility of investing in a mining operation on the Riddle Property. On October 13, 2017, Blethen issued a report titled “Technical Due Diligence Prefeasibility Study Business Plan and Valuation Riddle Aggregates LLC Morgan County, Alabama” (October Blethen Report).  8 [*8] In the October Blethen Report, Blethen concluded on the basis of a geologic review of the Riddle Property, including the drilling data in the ECS Report, that the Riddle Property contained 25,596,000 tons of proven mineral reserves. On the basis of a discounted cashflow (DCF) analysis that used a 15-year period and a 12% discount rate, the October Blethen Report stated that a hypothetical mine on the Riddle Property had a present value of $45,412,000. Riddle engaged Weibel & Associates, Inc. (Weibel), to appraise the Riddle Property. Weibel issued appraisals of a conservation easement on the Riddle Property on October 20 and November 6, 2017, both of which valued the conservation easement at $44,995,000. Weibel relied on the October Blethen Report for both of these appraisals. Blethen issued a nearly identical report (November Blethen Report) on November 22, 2017, after visiting the Riddle Property that reached the same conclusions regarding mineral reserves and present value. V. Syndication of Riddle Aggregates Group RAG served as the investment company in the conservation easement transaction. Longleaf held 100% of the interests in RAG upon its formation. RAG issued an offering summary outlining the opportunity for accredited investors to purchase membership units in RAG from Longleaf. Then RAG would purchase Longleaf’s membership interests in Riddle. The offering summary attached the conclusions of Weibel’s October 20, 2017, appraisal, and described the Riddle Property as “a limestone rich site with millions of tons of proven limestone reserves” with an estimated value of $45,340,000. RAG issued a confidential private placement memorandum (PPM), dated October 30, 2017, offering up to $7,397,000, in 999 units, with a minimum subscription of $100,000, equal to 13.5 units. The PPM presented investors with four options for the Riddle Property: (1) conserve the Riddle Property and make a charitable donation; (2) develop the Riddle Property as a limestone quarry; (3) hold the Riddle Property for long-term appreciation and future sale; or (4) lease the Riddle Property to a third party for the purpose of operating a limestone quarry. The PPM represented to potential investors that the development strategy and the leasing strategy could be profitable but warned investors that there were significant risks because they involved “a highly complex, expensive, and potentially dangerous process of  9 [*9] mining.” It included additional warnings that if the development option was chosen the company “would probably require significant additional capital.” The PPM further pointed out that because of the possibility of the placement of a conservation easement, “only potential Investors who are not focused on maximizing the potential cash return from an investment in the membership interest in the Company should consider subscribing.” The offering was fully subscribed, with 74 investors contributing a total of $7,397,000 to acquire 999 units in RAG, and Longleaf retaining one unit in RAG. On December 5, 2017, OS LLC retained a .01% interest in Riddle, and Longleaf’s other members sold their combined 97.99% interest in Riddle to RAG for $6,923,466. After this sale of the partnership interests, the interests in Riddle were held as follows: 97.99% by RAG, .01% by OS LLC, and 2% by the members of Freeman Five. VI. Donation of Conservation Easement and Fee Simple Interest and Riddle’s Tax Return On December 8, 2017, Riddle executed a deed of conservation easement on 227.95 acres of the 231.22-acre Riddle Property in favor of Atlantic Coast Conservancy, Inc. The deed of conservation easement was recorded on December 13, 2017. Also on December 13, 2017, Riddle conveyed the fee simple interest in the entire 231.22-acre Riddle Property, subject to the deed of conservation easement, to Atlantic Coast Conservancy Properties, LLC, via warranty deed. The real estate sales validation form recorded with the warranty deed lists the assessor’s market value of the Riddle Property as $352,071. On February 14, 2018, Weibel issued a final appraisal (Easement Appraisal) of the conservation easement on the Riddle Property. The Easement Appraisal relied on the November Blethen Report and valued the conservation easement on the Riddle Property at $44,995,000 as of December 8, 2017. Weibel issued another appraisal (Fee Simple Appraisal) on February 14, 2018, that valued the fee simple interest in the Riddle Property subject to the conservation easement at $355,000 as of December 13, 2017. On its Form 1065 for the period beginning December 6, 2017, and ending December 31, 2017, Riddle reported a charitable contribution of $44,995,000 related to the donated conservation easement and a charitable contribution of $355,000 related to the donated fee simple interest. Riddle claimed noncash charitable contribution deductions for  10 [*10] these amounts. Riddle attached the Easement Appraisal and the Fee Simple Appraisal to its Form 1065. VII. Summary of Expert Testimony A. Petitioner’s Experts 1. Gregory Gold Gregory Gold has worked in the mining industry for approximately 27 years and has held various positions in the mining industry. Currently, he works at Stantec Consulting Services, Inc. (Stantec). We recognized Mr. Gold as an expert in mineral valuation, mineral evaluation, mining engineering, and mining operations. Mr. Gold prepared a report on the feasibility of operating a mine on the Riddle Property. Mr. Gold’s report relied on the ECS Report, and a geological map prepared by the Geological Society of Alabama. Mr. Gold concluded that the Riddle Property contains approximately 32 million tons of minable limestone suitable for aggregate production, and he developed a two-phase mine plan that estimated a hypothetical mine on the Riddle Property would produce 27,963,169 tons of limestone over a 30-year mine life. 2. Darrell Chodorow Darrell Chodorow is an economist and a principal of the Brattle Group, an economic consulting firm. We recognized Mr. Chodorow as an expert in valuation. Mr. Chodorow’s testimony focused on valuation methodology and how a DCF method could be used to value assets. His report addressed how a DCF method could be used to value undeveloped land so long as cashflows and risks could be modeled reliably. 3. Michael Stine Michael Stine works at Stantec, where he manages the mining advisory and risk group. Before joining Stantec, he worked as an analyst with the Central Intelligence Agency, primarily covering global mineral supply chains. We recognized Mr. Stine as an expert in mineral valuation and aggregate market studies.  11 [*11] Mr. Stine’s valuation of the mineral resource on the Riddle Property was based on the income method. He prepared a DCF model to determine the fair market value of the economically recoverable limestone resource on the Riddle Property. He relied on Mr. Gold’s report that the Riddle Property contained approximately 32 million tons of minable limestone that could be sold as aggregate. Mr. Stine’s DCF model assumed a total sales volume of 27,963,169 tons over a 30-year mine life. He calculated the fair market value of the limestone resource on the Riddle Property to be between approximately $27.8 million and $34.6 million. 4. Kyle Catlett Kyle Catlett is a certified general real property appraiser in the State of Alabama. We recognized Mr. Catlett as an expert in real estate appraisal in Alabama. Mr. Catlett used the before and after valuation method and determined that the highest and best use of the Riddle Property before the placement of the conservation easement was as a limestone aggregate quarry. He used the income method known as the owner- operator method to determine the before value of the Riddle Property. His DCF analysis used a 15.5% discount rate and modeled a 30-year mine life using the production schedule for the mined limestone resources outlined by Mr. Stine. Mr. Catlett used the income method known as the royalty method to purportedly confirm the fair market value he determined using the owner-operator method. He determined the fair market value of the Riddle Property was $28,030,000 using the owner-operator method. 7 5. Barry Shea Barry Shea has served as an instructor for the Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP) instructor certification course and has been an AQB Certified 7 Mr. Catlett had a computational error in his original owner-operator DCF table that reflected a higher fair market value of $31,160,000, but he corrected the figure on the record at trial to $28,030,000. He made a similar error in his royalty method fair market value calculation, which he corrected from $31,140,000 to $28,020,000.  12 [*12] USPAP Instructor since 2002. We recognized Mr. Shea as an expert on USPAP. His testimony focused on the use of a DCF analysis to value real property. Mr. Shea’s report concluded that a DCF method can be used in the appraisal of land when the highest and best use is the generation of income over a period of time. 6. Joe Howle Joe Howle has over 38 years of professional experience in environmental compliance, including two years at Vulcan Materials Co. as an environmental specialist, and over 29 years as the environmental manager of its Southern & Gulf Coast Division. We recognized Mr. Howle as an expert in permitting and environmental compliance for aggregate mining in Alabama. Mr. Howle’s testimony focused on the permitting process for a mine in Alabama. Mr. Howle concluded in his report that it was reasonably likely that all the necessary permits could be obtained for limestone mining on the Riddle Property from the Alabama Department of Environmental Management within four to six months after the submission of applications for those permits. 7. Derek Loveday Derek Loveday is a geologist who works for Stantec. He has 32 years of experience in the mining industry. We recognized Mr. Loveday as an expert in geology and mineral resource evaluation for aggregate property. Mr. Loveday’s testimony focused on the quality of the limestone resource on the Riddle Property. He concluded that there is sufficient technical evidence to conclude that the Riddle Property contains limestone meeting ALDOT specifications that can be sold as aggregate. B. Respondent’s Experts 1. Michael Rogers Michael Rogers is a certified general real property appraiser in the State of Alabama. We recognized Mr. Rogers as an expert in real estate valuation.  13 [*13] Mr. Rogers concluded that the highest and best use of the Riddle Property before it was encumbered by the conservation easement was limited residential, agriculture, silviculture, and recreation with potential for future mining on the tract. He used the before and after valuation method to determine a fair market value of the conservation easement on the Riddle Property. He concluded that the fair market value of the Riddle Property before the conservation easement was $670,000, the fair market value of the Riddle Property after the conservation easement was $190,000, and the fair market value of the conservation easement was $480,000. Mr. Rogers relied on the comparable property sales method for his valuation conclusion. He explained that in the absence of reliable data, a credible use of the income approach to value property is not possible. 2. Brian Groff Brian Groff is a mine engineer with more than 25 years of experience in mine operations and mine consulting. We recognized Mr. Groff as an expert in mining engineering, mineral evaluation, and mineral valuation. Mr. Groff prepared a report evaluating the technical and economic feasibility of the Riddle Property for its potential use as a quarry. He concluded that Riddle did not have enough information on the date of valuation to evaluate the feasibility of a hypothetical quarry operation on the Riddle Property. Mr. Groff also prepared a rebuttal report to the expert reports of Messrs. Gold, Howle, and Stine. Mr. Groff identified issues with the mine plan developed by Mr. Gold, noted omissions by Mr. Howle of other permits a hypothetical mine would require, and concluded that Mr. Stine’s DCF model resulted in a gross overstatement of the net present value of a hypothetical quarry business on the Riddle Property. 3. Neal Rigby Neal Rigby has more than 50 years of experience in the international mining industry. He currently works as a corporate mining consultant and principal mining engineer. We recognized Dr. Rigby as an expert in mining engineering, mineral resource and reserve evaluation, and mine feasibility analysis.  14 [*14] He prepared a report on the feasibility of a proposed quarry on the Riddle Property. Dr. Rigby concluded that the technical and economic feasibility of developing and operating a quarry on the Riddle Property was highly questionable. He also prepared a rebuttal report to the expert reports of Messrs. Gold, Howle, and Stine. In his rebuttal report, he identified issues with Mr. Gold’s analysis of the limestone deposit on the Riddle Property. 4. Shannon Rentz Shannon Rentz is a professional geologist licensed in Texas. She is a member of the Geological Society of America and the Rocky Mountain Association of Geologists. Currently, she is employed as a geologist by the U.S. Department of the Interior. We recognized Ms. Rentz as an expert in geology, mineral evaluation, and mineral market analysis. In her report, Ms. Rentz concluded that there were several components of a complete and comprehensive market study that were not met by Mr. Stine’s report. She further concluded it was unlikely that the sales estimates presented by Mr. Stine could be met. OPINION I. Burden of Proof The Commissioner’s determinations in a Notice of Deficiency or adjustments in an FPAA are generally presumed correct, and the taxpayer bears the burden of proving them erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Republic Plaza Props. P’ship v. Commissioner, 107 T.C. 94, 104 (1996). Deductions are a matter of legislative grace, and taxpayers generally bear the burden of proving their entitlement to the deductions claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992). The Commissioner does not bear the burden of production with respect to penalties and additions to tax in partnership-level proceedings. See § 7491; see also Dynamo Holdings Ltd. P’ship v. Commissioner, 150 T.C. 224, 234 (2018). Section 7491 provides that the burden of proof on a factual issue may shift to the Commissioner if the taxpayer satisfies specified conditions. Among these conditions are that the taxpayer must have  15 [*15] “introduce[d] credible evidence with respect to [that] factual issue.” § 7491(a)(1). When each party has satisfied its burden of production, then the party supported by the weight of the evidence will prevail, and thus a shift in the burden of proof has real significance only in the event of an evidentiary tie. See Knudsen v. Commissioner, 131 T.C. 185, 189 (2008), supplementing T.C. Memo. 2007-340. We have discerned no evidentiary tie on any relevant factual question and are able to decide the issues here on the preponderance of the evidence. See, e.g., Bordelon v. Commissioner, T.C. Memo. 2020-26, at *11. Petitioner argues it has met the requirements of section 7491(a)(1) and (2), and respondent should bear the burden of proof. Petitioner argues that it presented credible evidence of compliance with the requirements of the Code and the Treasury Regulations through exhibits and witness testimony and that it complied with all substantiation requirements, maintained all required records, cooperated with the IRS audit, facilitated site visits, provided documents, and participated in interviews. We have rejected arguments similar to those petitioner offers. See Paul-Adams Quarry Tr., LLC v. Commissioner, T.C. Memo. 2025-112, at *34; Beaverdam Creek Holdings, LLC v. Commissioner, T.C. Memo. 2025-53, at *22–36. Even if we had perceived an evidentiary tie, petitioner has not met the requirements of section 7491 to shift the burden of proof. II. Amount of the Deduction A. Deductibility Section 170(a)(1) allows a deduction for any charitable contribution made during the tax year. Generally, no deduction is allowed for a contribution of less than a donor’s entire interest in a property. § 170(f)(3)(A). Section 170(f)(3)(B)(iii) makes an exception to this general rule for a contribution of a partial interest in property that constitutes a “qualified conservation contribution.” A “qualified conservation contribution” is defined as a contribution made (1) of a qualified real property interest, (2) to a qualified organization, (3) exclusively for conservation purposes. § 170(h)(1). B. General Valuation Principles If the taxpayer makes a charitable contribution other than money, the eligible deduction is generally equal to the fair market value of the property at the time of the donation. See Savannah Shoals, LLC v. Commissioner (Savannah Shoals II), 182 F.4th 1314, 1322 (11th Cir.  16 [*16] 2026), aff’g Savannah Shoals, LLC v. Commissioner (Savannah Shoals I), T.C. Memo. 2024-35; Treas. Reg. § 1.170A-1(a), (c)(1). The regulations define fair market value to be “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.” Treas. Reg. § 1.170A-1(c)(2). The value of property on a given date is a question of fact to be resolved on the basis of the entire record. Kaplan v. Commissioner, 43 T.C. 663, 665 (1965). To support their positions regarding valuation, the parties retained experts. We assess an expert’s opinion in the light of the expert’s qualifications and the evidence in the record. See Parker v. Commissioner, 86 T.C. 547, 561 (1986). When experts offer competing opinions, we weigh them by examining the factors the experts considered in reaching their conclusions. See Casey v. Commissioner, 38 T.C. 357, 381 (1962). We are not bound by an expert’s opinion that we find contrary to our judgment, and we can accept an expert’s opinion in its entirety or accept aspects of the expert’s testimony that we find reliable. Ranch Springs, LLC v. Commissioner, 164 T.C. 93, 128 (2025) (first citing Helvering v. Nat’l Grocery Co., 304 U.S. 282, 295 (1938); and then citing Boltar, L.L.C. v. Commissioner, 136 T.C. 326, 333–40 (2011)); Parker, 86 T.C. at 561. We may determine fair market value on the basis of our own examination of the evidence in the record. Silverman v. Commissioner, 538 F.2d 927, 933 (2d Cir. 1976), aff’g T.C. Memo. 1974-285. An established market does not exist typically for conservation easements. See Symington v. Commissioner, 87 T.C. 892, 895 (1986). Courts usually value easements indirectly using a “before and after” approach, seeking to determine the reduction in property value attributable to the easement. See Treas. Reg. § 1.170A-14(h)(3)(i). Under the before and after approach, the value of the easement is deemed equal to the fair market value of the real estate before the easement was granted minus the fair market value of the real estate as encumbered by the easement. See TOT Prop. Holdings, LLC v. Commissioner, 1 F.4th 1354, 1368–69 (11th Cir. 2021); Treas. Reg. § 1.170A-14(h)(3)(i). Experts for both parties used the before and after valuation approach to value the easement. In determining the fair market value of an easement we need to take into account the highest and best use of the property on the valuation date. Stanley Works & Subs. v. Commissioner, 87 T.C. 389,  17 [*17] 400 (1986); Treas. Reg. § 1.170A-14(h)(3)(i) and (ii). According to the Eleventh Circuit, the Supreme Court “instructed that ‘[t]he highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future,’ while not itself ‘the measure of value,’ was relevant to the ‘extent that the prospect for such use affects the market value.’” Savannah Shoals II, 182 F.4th at 1328 (emphasis added) (quoting Olson v. United States, 292 U.S. 246, 255 (1934)); see also Symington, 87 T.C. at 897; Paul-Adams Quarry, T.C. Memo. 2025-112, at *43 (discussing Olson). A use that is a higher value than the current use “requires both ‘closeness in time’ and ‘reasonable probability.’” Hilborn v. Commissioner, 85 T.C. 677, 689 (1985). Taking into account the highest and best use does “not eliminate the requirement that a hypothetical willing buyer would purchase the subject property for the indicated value.” Boltar, 136 T.C. at 336. C. Before Value of the Riddle Property 1. Valuation Approaches Courts often consider one or more of three approaches to determine the fair market value of real property: (1) the market approach, also known as the sales comparison or comparable property sales approach, (2) the income approach, and (3) a cost or asset-based approach. See Bank One Corp. v. Commissioner, 120 T.C. 174, 306 (2003), aff’d in part, vacated in part, and remanded sub nom. JPMorgan Chase & Co. v. Commissioner, 458 F.3d 564 (7th Cir. 2006). For vacant, unimproved property, the comparable property sales approach is “generally the most reliable method of valuation.” Estate of Spruill v. Commissioner, 88 T.C. 1197, 1229 n.24 (1987) (quoting Estate of Rabe v. Commissioner, T.C. Memo. 1975-26, 34 T.C.M. (CCH) 117, 119, aff’d, 566 F.2d 1183 (9th Cir. 1977) (unpublished table decision)). The comparable property sales approach determines fair market value by considering the sale prices of similar properties sold in arm’s-length transactions close in time to the valuation date. Savannah Shoals I, T.C. Memo. 2024-35, at *36. Because no two properties are identical, the appraiser must adjust the sale prices of the comparable properties, to account for differences between them, and the sales terms. Id. The income method determines a property’s fair market value by discounting to present value the expected future income from the property. See, e.g., Chapman Glen Ltd. v. Commissioner, 140 T.C. 294, 327 (2013). Income-based methods are not favored when valuing vacant  18 [*18] land with no income-producing history because they are inherently speculative and unreliable. Ranch Springs, 164 T.C. at 135 (citing Chapman Glen Ltd., 140 T.C. at 327); see also Excelsior Aggregates, LLC v. Commissioner, T.C. Memo. 2024-60, at *33; Savannah Shoals I, T.C. Memo. 2024-35, at *36. The cost or asset-based approach is based on the principle of substitution. It “derives the value of a property by estimating the reproduction or replacement cost of the improvements, deducting therefrom the estimated