Providing tax benefits for conservation is a wonderful incentive, particularly for those landowners who already have an interest in protecting their property’s natural, scenic or agricultural assets. The land that is protected must meet the requirements of Internal Revenue Code 170(h) for qualified contributions. The essentials of the requirements are that the conservation purpose must be for either:
The gift of an easement is a charitable donation that may be deducted from federal income taxes. The value of the donation is determined by an independent appraisal.
The tax deduction for conservation easements allows a donor to take a deduction of up to 50% of adjusted gross income per year and the full amount of the deduction may be taken over a period of up to 16 years. Qualified farmers may deduct up to 100% of their income.
New York State offers an income tax credit of 25% of property taxes, including school district taxes, up to $5,000 per year. This annual deduction is available to future owners of the protected property.
Private landowners who freely donate conservation easements are qualified to claim an income tax deduction for conservation, according to the Internal Revenue Code.
Real estate developers who set aside open space for conservation are not typically eligible for this tax benefit.
Appraising conservation easements is a specialized field in real estate appraisal work. In establishing a value for a conservation easement, it’s essential to work with a qualified conservation appraiser who follows Uniform Standards of Professional Practice. A list of qualified appraisers is available from Winnakee.
Winnakee Land Trust must receive a copy of your appraisal prior to signing your IRS Form 8283. The appraisal must be performed no earlier than 60 days prior to the donation of the easement and no later than the due date of the tax return on which the deduction is first claimed. The appraisal must reflect the value of the easement on the date of conveyance. The easement donor is solely responsible for any determination of the value of the donation.
Winnakee requires a copy of the complete appraisal. Winnakee has a legal obligation to obtain supporting materials for any tax deduction claim and will not engage in any transaction for which complete and satisfactory documentation is not supplied.
Please be sure you receive a written acknowledgement from Winnakee for your donated conservation easement at the time of closing.
Call Warren Rosenthal, Land Protection Manager, at 845-876-4213 or email firstname.lastname@example.org to find out more about the financial benefits of protecting your property.