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- Conservation Easements
Good news ... Charitable Giving Incentives Made Permanent
On December 18, President Obama signed the Protecting Americans from Tax Hikes (PATH) Act of 2015 into law. Part of the omnibus budget (HR 2029), the legislation includes a number of important tax provisions and charitable giving incentives, most notably, it reinstates retroactively to January 1, 2015 and permanently extends the IRA Charitable Rollover provision and the enhanced federal tax incentive for donations of conservation easements.
IRA Charitable Rollover Provision
The IRA Charitable Rollover provision, established under the Pension Protection Act, allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their IRA, without treating the distribution as taxable income and counts towards their yearly Minimum Required Distribution (MRD). To qualify, contributions must be made from a traditional IRA or Roth IRA and go directly to a public charity.
The tax benefits of the IRA Charitable Rollover are available to taxpayers regardless of whether they itemize their returns. This particularly helps older Americans who no longer file itemized federal tax returns. The mandatory distribution from their IRA would otherwise trigger a tax burden, even if they ultimately donate the money to charity. The IRA rollover provision removes these negative tax consequences and encourages Americans to give back to their communities during their lifetime.
Enhanced Conservation Easement Tax Incentive
Landowners who donate a conservation easement can claim a federal income tax deduction. The enhanced conservation easement tax incentive raises 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%; allows qualified farmers and ranchers to deduct up to 100% of their AGI; and, increases the number of years over which a donor can take deductions from 6 to 16 years. The now permanent incentive has been highly successful by encouraging private, voluntary land conservation. The enhanced incentive helps family farmers and landowners of modest means protect their land by way of a more equitable and cost-effective tax system that allows these donors to realize more of the value of their charitable donation.
For more information about these incentives or other ways to give, contact Susanne Kibler-Hacker at 603 224 9945 or at skh@forestsociety.org.