Are there financial benefits to donating a conservation easement?

Yes, by donating a conservation easement you may benefit in several possible ways.  Consult a qualified professional to find out how these possibilities apply in your personal situation.

Federal income taxes:

  • If you donate some or all of the value of the conservation easement to a qualified organization, you may be eligible to take a federal income tax deduction for the value of the charitable gift.  To be deductible for federal income tax purposes the easement must meet certain standards established by the federal government.

Federal Estate Taxes:

  • When a conservation easement is placed on a property, it typically lowers the property’s value for federal estate tax purposes and may decrease estate tax liability.  Therefore, easements may help heirs avoid being forced to sell off land to pay estate taxes and enable land to stay in the family.  Under certain situations, conservation easements can be granted after the death of the landowner and still provide estate tax benefits.

Federal Gift Taxes:

  • The IRS requires recipients to pay taxes on gifts over a certain value.  If you want to give your land to your children without requiring them to pay taxes on your gift, you may need to give the land in installments to stay below the taxable value level. Conservation easements may help to reduce the value of your property, making it possible for you to give all of your land to your children more quickly.

Local Property Taxes:

  • Conservation easements usually reduce property value, which, in turn, may reduce property tax assessment. If your land is already enrolled in the Current Use Assessment Program, you would probably not see any further reduction in property taxes as the result of granting a conservation easement.  If your land is not eligible for the Current Use Program because it is less than 10 acres, you may wish to apply for a Conservation Restriction Assessment and may see a reduction in your local property tax.