TAX BENEFITS OF DONATING CONSERVATION & AGRICULTURAL EASEMENTS
Placer Land Trust does not offer financial or legal advice regarding tax-deductible donations of land, easements, or funds; however, the general principles of tax-deductible donations are listed below for your reference. Individuals are strongly advised to obtain their own legal and financial advice.
In short, donating a conservation or agricultural easement to Placer Land
Trust not only preserves the conservation or agricultural values of your
land, but may also provide you with substantial tax benefits.
NEW BENEFITS FOR EASEMENT DONORS!
The 2006 Pension Protection Act contains provisions that make it easier
and faster for donors of conservation easements to obtain tax deductions.
These benefits are available only through 2007, and they are especially
beneficial to farmers and ranchers. For more details, click
here.
General Principles
There are a few general principles that apply to the donation of conservation or agricultural easements.
The first is that in order to be deductible for income or estate tax purposes, the donation must be given to a qualified 501(c)(3) organization. Placer Land Trust meets this requirement.
The second principle is that in order to qualify as a charitable donation, an easement must provide public benefit by permanently protecting important conservation resources (or "conservation values"). However, an easement does not have to cover all of the property, preclude all use or development, or allow public access to qualify.
The third principle is that, because a gift of a conservation or agricultural easement almost always has a value of more than $5,000, the donor must obtain a qualified appraisal in order to claim a tax deduction. The appraisal must be prepared by an independent, qualified appraiser and must contain certain factual information specified by IRS regulations. The donor must file a summary report (IRS Form 8283), signed by the appraiser and Placer Land Trust, with the donor's federal income tax return. For more information on these requirements, please consult a trusted financial advisor.
Income Tax Benefits of a Gift of an Easement
When a gift of conservation or agricultural easement meets the requirements described above and the value is established by a qualified appraisal, the donation will be deductible against the donor's federal and, in some cases, state income taxes. This deduction can mean substantial tax savings.
Estate Tax Benefits
There is no limit on the amount of a charitable deduction for estate tax purposes. If a person bequeaths a conservation or agricultural easement to Placer Land Trust through a Will or Living Trust, that easement is ignored entirely in calculating the federal estate tax. Because estate tax rates run as high as 55%, the estate tax savings can be significant.
Property Tax Benefits
When a donor makes an outright gift of a conservation or agricultural easement, any property taxes for the easement itself become the obligation of the Trust.
Conclusion
This document summarizes complex federal and state laws. A summary of these laws must, by necessity, be an over-simplification. It is essential that the landowner seek independent legal and tax advice before finalizing any land conservation transaction. This will ensure that the donor fully understands the nature of the transaction and what the anticipated tax benefits will be.
It is also important that the donor consult with Placer Land Trust prior to making a gift through a Will. This ensures that Placer Land Trust not only understands what the donor's objectives are, but it allows Placer Land Trust to make a hazardous waste assessment and take other steps that are necessary before it can accept the gift.
Charitable gifts of conservation and agricultural easements can have an enormous impact upon the growth and success of the Placer Land Trust's conservation program.
To learn more about how land and easements are evaluated for preservation, contact Executive Director Jeff Darlington at (530) 887-9222 or jeff@placerlandtrust.org.
 Placer Land Trust 11521 Blocker Drive, Suite 100 Auburn, CA 95603 (530) 887-9222 info@placerlandtrust.org |