What is a conservation easement?
- A conservation easement is a voluntary legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values.
- The Internal Revenue Service allows a deduction if the easement is perpetual, is donated “exclusively for conservation purposes” and meets certain criteria for those conservation purposes.
- Landowners retain many of their rights, including the right to own and use the land, sell it and pass it on to their heirs.
- In many situations, the owner will see no difference in how the land looks or is maintained. when developing the conservation easement, the land owner is fully involved in setting up the easement as is apprised of what can and cannot be done with the land.
What are the benefits of a conservation easement?
- Donating a conservation easement to a qualified nonprofit organization can significantly reduce federal and state income taxes, local property taxes (on a county-by-county basis), and estate and inheritance taxes.
- The amount of the tax deduction is determined by the value of the conservation easement. The value of a donated easement is deductible from federal income taxes just like a contribution to a church or charity. Estate planning on family farms and ranches may use conservation easements to promote family ownership for future generations.
- In addition, profitability and economic survival are critical concerns in farming and ranching, as in any business. However, unlike other business, you work directly with the land. Through a conservation easement, a landowner can protect his property to ensure that future generations have continued opportunities to ranch, farm and practice good stewardship.
Next (Click a link to access the page):
The Enhanced Easement Incentive