Donation of a Conservation Easement may entitle a landowner to significant federal and state income tax deductions.
Donating Conservation Easements
Note: This information is intended as general information, not specific legal or financial advice.
What is a conservation easement?
Conservation easements are legal agreements that enable landowners to permanently protect their land while continuing to own and enjoy it. In a conservation easement transaction, landowners work collaboratively with a qualified nonprofit land trust such as the Columbia Land Conservancy (CLC) to determine which activities will be permitted on the property in the future, and which will not. Often, uses such as farming, appropriate forestry, and the right to build a home or two are permitted, while other development of the property is restricted. Although state statutes and federal regulations provide a guiding framework, the exact details of each conservation easement can be tailored somewhat to meet the unique needs of each property and landowner.
Why consider donating a conservation easement to a land trust?
Landowners who are concerned with protecting the integrity of the natural resource and agricultural values of their property from future development often find a conservation easement to be a useful tool. Additionally, landowners who are concerned with issues such as a proactive response to climate change and mitigation of negative impacts to our regional ecosystems may find that a conservation easement helps them to achieve their goals for their property.
What are the financial implications of donating a conservation easement?
Conservation easements almost always permanently extinguish some of the development rights associated with a given property. As such, they affect the property’s value. The value of the conservation easement is generally defined as the difference between what the property is worth unrestricted and its value after the conservation easement is in place. As a general rule, the more restrictive a conservation easement is (i.e. the more value that is given up), the higher the value of the easement, particularly when it comes to restricting further development.
Donating a conservation easement to an organization such as the Columbia Land Conservancy generally qualifies as a tax deductible charitable gift. Such gifts can result in significant income, property, estate, and capital gains tax benefits, though there are also some up-front costs.
How do I learn more?
Give us a call! CLC’s trained staff would be happy to walk you through the various conservation options that might be suitable for you and your property, and to answer all your questions. Please call us at 518.392.5252. We look forward to hearing from you!