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Expanded Easement Tax Incentives Help Sustain A Local North Carolina Farmer

NC - Curtis Holbert wanted to keep his land the way it is. But Mr. Holbert knew that his current income was not sufficient enough to care for his farm and pay income taxes at the same time.
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Expanded Easement Tax Incentives Help Sustain A Local North Carolina Farmer

Saving a Livelihood 

Curtis Holbert wanted to keep his land the way it is. But Mr. Holbert, 72, knew that his current income was not sufficient enough to care for his farm and pay income taxes at the same time. When Mr. Holbert received a postcard promoting the Land Trust Alliance’s Rally: The National Land Conservation Conference that mentioned the expanded federal tax incentive, the long-time farmer found a glimmer of hope in an otherwise discouraging situation.

Together with the help of the Polk County Soil and Water Conservation District, the Hyde County Soil and Water Conservation District, and conservation broker Elizabeth Burdett, the parties recently finalized an agricultural conservation easement on Mr. Holbert’s 1,000-acre farm. A conservation easement is a tool that helps landowners across America to voluntarily and permanently protect their land.

The easement included a two-mile lakefront stretch of Alligator Lake that is on the farm property that contains the oldest known Pond Cypress in the world, over 1,400 years old. In order to protect the Pond Cypress grove and the prime soils that make up his farm, Mr. Holbert had been longing for an easement in the past, but never had the proper finances to have it done. But now, with the expanded tax incentive, he will have sufficient resources to continue cultivating his farm.

“Development is taking over our area. We need to make sure that the land stays the same before there are no more farms,” said Mr. Holbert. Mr. Holbert has been a corn, soybean, and wheat farmer for many years, and has witnessed first-hand what development has done to the farming community. As a result, he has decided to keep his property intact.

While preparing the conservation easement on his farm was a long process, Mr. Holbert was happy with it. He said, “I have been working with some good people on this; they all have been very helpful.”

Conservation Tax Incentive Helping Others

Thanks in part to the enhanced tax incentives for conservation easements, other soil and water districts in North Carolina are keeping busy as well. The Polk County Soil and Water Conservation District completed four agricultural conservation easements in 2007, which when combined will mean almost 1,092 acres of farmland land conserved in Polk County, North Carolina alone.

Conservation broker Elizabeth Burdett explained, “The enhanced tax incentive heightened awareness in the community and increased incentives for farmers.”

Under the old tax incentive, landowners received a 30% tax credit for donating a conservation easement. A 50% tax credit is now given to those easement donors under the expanded tax incentive. And for ranchers and farmers, the expanded tax incentive offers a potential credit of up to 100% of taxes on their operating income. However, the new federal tax law that offers the higher percentage of tax incentive expired at the end of 2007, though legislation is in the works to extend it.

“Many medium-income landowners who were contemplating conserving their land in the past would have donated easements if the increased tax incentive had been available. But since the tax incentive was not as great as it is now, it caused many landowners who ‘were on the fence’ about conservation easements to sell their land for residential development” said Burdett.

Burdett also added that communities would benefit if the tax incentive was made permanent. “It would help dramatically because many farmers who are interested in putting an easement on their farm cannot do so this year for various reasons, and we don’t have enough time to process all the easements that could be done by the end of the year.”

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