Questionable Conservation Easement Donations
By: Nancy McLaughlin
Since 1980, a landowner who donates a qualifying conservation easement to a government agency or charitable conservation organization has been eligible for a charitable income tax deduction generally equal to the value of the easement under Code § 170(h). Aconservation easement is a legally binding agreement between the owner of the land encumbered by the easement and the holder of the easement that restricts the development and use of the land to achieve certain conservation
goals, such as the preservation of open space, wildlife habitat, or agricultural land. Alandowner who donates a qualifying conservation easement also removes the value of the easement from his or her estate free of transfer tax under Code § 2522(d) and, since 1997, may potentially exclude up to an additional 40% of the value of land encumbered by the easement from the estate for estate tax purposes under Code § 2031(c).
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