Congressional Action Makes Tax Incentive for Donation of Conservation Easement Permanent

A few days prior to Christmas, the House and Senate took strong bipartisan action to pass a bill that made enhanced tax incentives for conservation easement donations permanent.  This action represents a huge win for conservation and landowners who wish to permanently protect the natural features of their property, ease their tax burden, and potentially lessen estate taxes on heirs to property.

This enhanced incentive can help many landowners choose conservation, even those of modest means, by:

  • Raising the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%;
  • Allowing qualified farmers and ranchers to deduct up to 100% of their AGI; and
  • Increasing the number of years over which a donor can take deductions from 6 to 16 years.

Before Congress took this recent action, an agricultural landowner earning $50,000 a year who donated a conservation easement worth $1 million could take a total of no more than $90,000 in tax deductions.  Now, under the enhanced incentive, that same landowner can take as much as $800,000 in tax deductions – still less than the full value of their donation, but a significant increase.

Land placed in conservation easement may be utilized for a wide range of activities including farming, grazing, hunting, recreation, and the conservation of natural resources.  Land under easement can also be passed on to heirs or sold.  In essence, a conservation easement allows a private landowner to permanently retire certain land uses and development rights on a property in order to protect significant natural resources.

Conservation organizations like The Nature Conservancy have used conservation easements for many years as an effective means of protecting sensitive natural resources while still keeping land in private ownership.  Within the upper Green River region, for example, the Conservancy already holds over 60 such easements on privately owned property, focused primarily on lands with direct frontage along the Green River or a major tributary.


 

If you are a landowner interested in learning whether a conservation easement is right for you, you may contact Dian Osbourne, Director of Protection, by email at dosbourne@tnc.org or by phone at (859) 259-9655  x5016 to learn more.