Steps to Donate an Easement
The following are the basic steps in donating a conservation easement. These may vary from land trust to land trust and region to region.
- Landowner and land trust representative(s) meet to discuss landowner’s wishes, needs and conservation objectives. The land trust representative describes the land trust and its policies, and explains how a conservation easement works, appropriateness for the property, and any other conserva¬tion options that may be available to the landowner.
- Landowner reviews the material, consults with family members, legal counsel, and/or tax advisors, and indicates an interest in further exploration of an easement.
- A land trust representative visits the property to evaluate its features and the natural and open-space resources, and consults again with the owner on the easement terms and the long-term objectives. The land trust representa¬tive determines whether protection of the property serves the public interest and, (if donated), which of the various IRS public benefit tests is satisfied. The land trust conducts a baseline study to inventory and document the resource values of the property.
- After consulting with family members, advisors, or others, the landowner reaches a preliminary agreement with the land trust on the proposed terms of the easement and property description.
- The land trust board approves the conservation easement, making a find¬ing as to the public benefit of the easement and how it fits with the land trust’s strategic plan.
- Landowner provides chain of title, certification of title or title report to the land trust.
- The landowner contacts the lender, if any, to arrange for subordination of mortgage. The mortgage must be subordinated for the conservation ease¬ment to be effective and (if donated) for a tax deduction to be available.
- Landowner determines if certain IRS requirements for an easement to be tax deductible are met.
- Conservation easement is finalized and signed.
- The signed easement documents, usually including the Baseline Report, are recorded at the county courthouse.
- Most land trusts ask conservation easement donors to make a donation to the land trust to cover the costs of monitoring and enforcing the conser¬vation easement in perpetuity.
- If the landowner intends to take a qualified tax deduction or claim a credit for the non-cash charitable gift, the landowner is responsible for hiring an independent appraiser to determine the value of the gift.
- The landowner claims a federal income tax deduction for the donation on a special form with his or her income tax return (Form 8283). Depending on the state, there may be state and local tax savings as well.
- The land trust has the responsibility of monitoring the property once or twice per year to ensure that all of the easement conditions are met.