THE TRUTH FOR PUBLIC LAND
(Page 2 of 4)
When an easement is donated to a local land trust, the
donor generally is expected to make a contribution to an
endowment that covers the costs of establishing baseline
data, annual monitoring to assure that the terms of the
easement are being met, and enforcement if necessary. The
amount of this contribution, which is tax deductible, is
negotiated with the land trust and is based on the
complexity of monitoring and other anticipated
difficulties. For the Moores' easement, the main expense
was a "before and after" appraisal to document the value of
the income tax deduction.
RELATED CONTENT
The satisfaction of knowing they've done something
significant to preserve the land and its watersheds,
wildlife, and agricultural status is the greatest reward
for Joe, Beth, and the numerous other landowners who have
granted a total of 51 conservation easements protecting
66,482 acres in the Rocky Mountains alone. But in addition
to these intangible rewards, the donation of a permanent
conservation easement can also earn significant income,
estate, and property tax benefits for donors. These
benefits are based on the premise that a reduction in the
sales value of the land will result from the development
restriction. Here's how it works:
When a piece of land's development value is donated to a
qualifying conservation organization, the monetary
equivalent of this right becomes deductible from the
landowner's income taxes as a charitable contribution.
Additionally, the appraised value on which the property and
estate taxes are figured may also be reduced. This can mean
the difference between a landowner's heirs being forced to
sell inherited family land in order to pay estate taxes,
and keeping the farm in the family.
In order to be deductible for income tax purposes, a
charitable easement must meet what is known as a
conservation test. The Moores' easement qualified because
it protects important wildlife habitat. Other values the
IRS will grant easement deductions for include the
protection of natural ecosystems, the preservation of
outdoor recreational areas open to the public, the
conservation of open space that provides scenic enjoyment
for the public or that furthers an adopted governmental
conservation policy, and the protection of historically
important land areas or buildings (known as preservation
easements).
The second major requirement for tax deductibility is that
an easement must be donated for guardianship to a
qualifying conservation organization-such as a citizens'
land trust (like Upper San Juan Land Protection) or to an
agency of local, state, or federal government (such as the
Colorado Division of Wildlife). Helping people organize
land trusts and teaching them how to assure that their
conservation easements will be legally correct are among
the services performed by the Trust for Public Land.
