Income Tax Incentives for Land Preservation
Over the years, TLC has worked with a number of families to help them preserve the land they love. Some families chose to donate land, others donated permanent conservation easements. Both have income tax benefits, since the owner is giving up something of monetary value.
With a simple donation of land to TLC, a real estate appraisal is performed to arrive at the value of the donation.
With a conservation easement, a certified appraisal is done to determine the value of the easement itself. This appraisal determines the "before" and "after" values of the property. The difference between these two values is looked at by the IRS as a charitable contribution, and may be used as a deduction when filing your federal income tax.
If you've been keeping track, you know that an enhanced income tax incentive that kept coming up for votes in Congress for several years was finally made permanent in 2015. What does this mean for easement donors?
- Raising the deduction a donor can take from 30% to 50% of his/her annual income;
- Extending the carry-forward period from 5 years to 15 years;
- Allowing farmers to deduct up to 100% of their income (instead of 50%).
These increases can make a big difference to donors! The number one reason people give for wanting to put a conservation easement on their land is to keep it like it is, so it doesn't get destroyed or developed. If they can benefit from their donation by claiming an income tax deduction, that is icing on the cake.
For more information on conservation or agricultural easements and potential tax benefits: Contact Linda Balek, Land Protection Specialist, 815/337-9502.