conservation easement is a voluntary legal agreement between a
landowner and a land trust or government agency that permanently
limits uses of the land in order to protect its conservation values.
retain many of their rights, including the right to own and use the
land, sell it and pass it on to their heirs.
are the benefits of conservation easements?
easements allow people to protect the land they love. They are the
number one tool available for protecting privately owned land. All
conservation easements must provide public benefits, such as water
quality, farm and ranch land preservation, scenic views, wildlife
habitat, outdoor recreation, education, and historic preservation.
does a conservation easement restrict use of the land?
depends on what you’re trying to protect. If you’re
placing land under easement, you can work with your land trust to
decide on terms that are right for the land and right for you.
example, if it’s important to you to be able to build a home on
the land or to subdivide your property, you may be able to reserve
those rights -- as long as you’re still protecting important
conservation values (such as productive farmland or wildlife
habitat). You can use an easement to protect your whole property or
part of it.
every easement is unique, there are a few general rules. Farming and
ranching are usually permitted. Development is almost always limited.
Surface mining is almost always off-limits. While some easements
require public access, many do not.
I sell a conservation easement?
conservation easements are donated. But if your land has very high
conservation value, your land trust may be willing to raise funds to
purchase an easement. In particular, a number of federal, state, and
local programs provide funding to purchase easements on farm and
a conservation easement reduce my income taxes?
conservation easement donation can result in significant tax
benefits, if it meets the requirements of federal law. It may lower
your federal income tax, because you can claim the value of the
easement as a tax-deductible charitable donation. It may also lower
your state income tax, depending on your state laws.
a conservation easement help with estate planning?
Often, one of the biggest advantages of a conservation easement is
that it helps you pass on your land to the next generation. A
conservation easement helps you plan for the future of the land and
it can significantly lower your estate taxes.
conservation easements permanent?
most cases, yes. Most easements "run with the land,”
meaning that all not only the original owner but all owners that come
after them are subject to the easement. A few conservation programs
use temporary easements -- but only permanent conservation easements
qualify for income and estate tax benefits.
much land is protected by conservation easements?
every year! Conservation easements are becoming very popular, in part
because of their flexibility working with landowners to achieve their
goals. As of 2010, nearly 9 million acres in the United States were
protected by state and local land trusts through conservation
do I put a conservation easement on my land?
by talking with Pure Midway to see if we are a good fit for your
project. Talk to us about the conservation values you want to protect
and how you want to use the land. Be sure to talk with family members
as you consider your conservation options. This is a big decision, so
it’s important to consult with your attorney and financial
is the role of Pure Midway?
Pure Midway’s job to make sure that the restrictions described
in the easement are actually carried out. To do this, Pure Midway
monitors the property on a regular basis, typically once a year.
Pure Midway will work with you and all future landowners to make sure
that activities on the land are consistent with the easement. If
necessary, Pure Midway is responsible for taking legal action to
enforce the easement.
I need to make a stewardship contribution?
depends. When a land trust agrees to hold a conservation easement,
they take on significant stewardship responsibilities. Most land
trusts maintain a stewardship fund to make sure they’ll be able
to carry out these responsibilities. Often, land trusts ask easement
donors to contribute to this fund. But, usually, the amount of the
stewardship contribution is more than offset by the tax incentives
for donating the easement.
have found that conservation easements offer great flexibility, yet
provide a permanent guarantee that the land will not be developed.
For example, an easement on property containing rare wildlife habitat
might prohibit any development, while one on a farm might allow
continued farming and the building of additional agricultural
structures. An easement may apply to only a portion of the property,
and need not require public access.
landowner may sell a conservation easement, but usually easements are
donated. If the donation benefits the public by permanently
protecting important conservation resources and meets other federal
tax code requirements, it can qualify as a tax-deductible
The amount of the donation is the difference between the land’s
value with the easement and its value without the easement. Placing
an easement on property may or may not result in property tax
most importantly, a conservation easement can be essential for
passing land on to the next generation. By removing the land’s
development potential, the easement lowers its market value, which in
turn lowers estate tax. Whether the easement is donated during life
or by will, it can make a critical difference in the heirs’
ability to keep the land intact.
Incentives: A Key to Conservation Success
tax policies have a huge impact on how much land we’re able to
protect. Tax incentives for land conservation offset part of the loss
in property value when a landowner donates an easement, which makes
conservation a viable option for more landowners. Tax incentives for
voluntary land conservation have proven to be hugely successful,
helping land trusts to protect over 50 million acres nationwide.
Income Tax Benefits
of the most significant tax incentives is the federal income tax
deduction, which Congress made permanent in 2015. This powerful tool
allows modest-income donors to receive greater credit for donating a
very valuable conservation easement on property they own. With the
enhanced incentive in place, the pace of conservation exceeds one
million acres per year!
tax incentives are another important consideration for many
landowners — especially farm and ranch families, who can be
hard hit by estate taxes. In some cases, estate taxes force families
to subdivide or sell their land. Estate tax incentives for
conservation create an alternative, which can help to keep land
intact, in production, and in the family. The Alliance helped to
create the first estate tax incentives for conservation and we keep
working to improve these incentives so they benefit more families and
help save more land.
from the Land Trust Alliance Website:
Tax Incentives for Land Conservation
landowners, donating a conservation easement is a way to protect
places they love. It’s also a major financial decision. When
landowners donate a conservation easement, they give up part of the
value of their property — often their family’s biggest
asset. Tax incentives offset some of that loss in property value,
making conservation a viable option for more landowners.
to Use the Federal Conservation Tax Deduction
2015 Congress enacted one of the most powerful conservation measures
in decades: the enhanced federal tax incentive for conservation
permanent conservation easement tax incentive is a powerful tool that
helps Americans conserve their land voluntarily.
land trusts across the country, the permanent incentive represents
vastly increased opportunities to protect the special places in their
widely varied communities.
you own land with important natural, agricultural or historic
resources, donating a conservation easement can be a prudent way to
both save the land you love forever and to realize significant
federal tax savings.
conservation easement, also called a conservation agreement, is a
voluntary and legally binding agreement between a landowner and a
land trust or government agency.
a landowner donates an easement to a land trust or public agency, she
or he is giving away some of the rights associated with the land. The
easement permanently limits uses of the donated parcel in order to
protect its conservation values, as specified in the Internal Revenue
Code (IRC) 170(h).
easements offer private landowners flexibility in protecting their
land. For example, a donating landowner can retain the right to grow
crops on a parcel while, at the same time, relinquishing the right to
build additional structures on the parcel.
land trust is responsible for making sure that a landowner adheres to
the conservation terms of the easement. An easement may apply to all
or a portion of the property and may or may not allow for public
access to the property. A landowner who has donated a conservation
easement can sell the land or pass it on to heirs, and future owners
of the property are bound by the terms of the easement.
does the permanent, enhanced tax incentive work?
a conservation easement is voluntarily donated to a land trust or
government agency, and if it benefits the public by permanently
protecting important conservation resources, it can qualify as a
charitable tax deduction on the donor’s federal income tax
enacted temporarily in 2006, the tax incentive was made permanent in
2015 and increases the benefits to landowners by:
the deduction a donor can take for donating a conservation easement
to 50%, from 30%, of his or her annual income;
the carry-forward period for a donor to take a tax deduction for a
conservation agreement to 15 years from 5 years; and
qualifying farmers and ranchers to deduct up to 100% of their
income, increased from 50%.
vary greatly in value. In general, the highest easement values are
found on tracts of open space under high development pressure. In
some jurisdictions, placing an easement on one’s land may also
result in property tax savings for the landowner.
is an example of the financial benefit that the permanent tax
incentive provides a landowner?
to 2015, a landowner earning $50,000 a year who donated a $1 million
conservation easement could take a $15,000 deduction (30% of his or
her income) for the year of the donation and for an additional five
years, generating a total of $90,000 in tax deductions.
new, permanent incentive allows that landowner to deduct $25,000 (50%
of income) for the year of the donation and for each of an additional
would result in a total of $400,000 in deductions. If the landowner
is a farmer or rancher, he or she can deduct $50,000 (100% of income)
in the first year and then for each of the following 15 years,
realizing a maximum of $800,000 in deductions.
anyone deduct more than the value of his or her gift of an easement?
can never deduct more than the fair market value of the gift. The
permanent incentive simply allows landowners to deduct more of that
fair market value.
qualifies as a farmer or rancher?
2015 law defines a farmer or rancher as someone who receives more
than 50% of his or her gross income from “the trade or business
of farming.” The law references IRC 2032A(e)(5) to define
activities that count as farming, including:
the soil or raising or harvesting any agricultural or horticultural
commodity (including the raising, shearing, feeding, caring for,
training and management of animals) on a farm;
drying, packing, grading or storing on a farm any agricultural or
horticultural commodity in its unmanufactured state, but only if the
owner, tenant or operator of the farm regularly produces more than
one-half of the commodity so treated; and
planting, cultivating, caring for or cutting of trees, or the
preparation (other than milling) of trees for market.
an easement to qualify for a farmer or rancher, it must contain a
restriction requiring that the land remain “available for
agriculture.” This provision also applies to farmers who are
organized as C corporations. Additionally, Alaska Native Corporations
are eligible as farmers or ranchers.
these changes apply to gifts of land?
expanded incentive does not apply to gifts of land in fee. It only
applies to gifts that qualify under IRC 170(h)(2), such as
conservation easements. A landowner considering the donation of land
should consult an attorney to determine whether the structure of his
or her gift should be changed to take advantage of the permanent
does the permanent incentive apply?
permanent incentive applies to all conservation easements donated
after December 31, 2014.
other restrictions apply?
easement donations must comply with “conservation purposes”
as defined in IRC 170(h). A donated easement must be a true gift. It
must protect significant natural, agricultural or historic resources
that public agencies or land trusts want to have conserved. A donated
easement cannot serve to simply prevent development on a property or
be part of a “quid pro quo” agreement in exchange for a
government action, such as issuance of a building permit or a zoning
donors who use this provision be audited by the IRS?
advantage of the 2015 law should not affect one’s likelihood of
being audited. However, all donors should note that the IRS does pay
attention to donations of property that are high in value, including
donations of conservation easements.
makes it important for donors and their advisors to know and follow
the law, utilize a reputable professional appraiser who has
experience in the appraisal of conservation easements and donate to a
reputable land trust that has adopted and implemented Land
Trust Standards and Practices.
is the role of Pure Midway?
easement donors should know that donating a permanent conservation
easement is a big commitment requiring careful consideration and
independent legal advice.
a conservation easement requires a working partnership with a land
trust such as Pure Midway— and time for careful drafting of
documents and maps, baseline documentation and a professional
appraisal. Landowners should understand that a land trust may
decline to accept a donation that does not meet both the legal
requirements and the land trust’s own specific charitable
mission and strategic plan. In addition, land trusts will want to see
the appraisal before accepting your gift.
do other laws affect easement donations?
2006 law (PL109-280) redefines who is a “qualified appraiser,”
so appraisers need to show donors that they are qualified under the
new law, which states that a qualified appraiser must “demonstrate
verifiable education and experience in valuing the type of property
subject to the appraisal.”
2006 law also tightened the rules for easements on “certified
historic structures.” If you are protecting a property that
includes such a structure, new regulations, including a filing fee
and specific appraisal requirements may apply to you.
Income Tax Credits for Conservation
addition to the federal tax deduction, 16 states offer some form of
tax credit for conservation easement donations; however Utah does not
offer any form of tax credit for conservation easement donations.