DeJoria

BACKGROUND

A. Tuna Canyon The property at issue on appeal consists of 417 acres of undeveloped land along the southerly slope of the Santa Monica Mountains and the Pacific coastline, located in the City of Malibu and unincorporated areas of Los Angeles County (Tuna Canyon). DeJoria purchased Tuna Canyon in 1990, intending to develop the property into 12 or more 20-acre estates. However, after walking the land, DeJoria changed course and decided to donate Tuna Canyon to preserve it as open space for the enjoyment of the public. B. DeJoria’s transfer of Tuna Canyon to MRT In 2000, DeJoria approached MRT, a nonprofit land trust dedicated to preserving land in the Santa Monica Mountains, with a proposal to sell and gift Tuna Canyon to MRT. DeJoria and MRT executed a purchase agreement that required Tuna Canyon to “be held as [o]pen [s]pace in [p]erpetuity and that no development of any kind shall take place on the [p]roperty.” DeJoria agreed to sell Tuna Canyon to MRT for $1,060,000 and donate the remainder of the appraised value of $13 million as part of the purchase. For his charitable donation, DeJoria received a tax deduction of $11,400,000. DeJoria executed a grant deed…