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Easement Incentive to Expire December 31st; Likely to be Renewed Retroactively

Advocates Alert: December 18, 2009

Barring an unforeseen breakthrough, it appears the Senate -- still struggling with health care -- will adjourn for the year without acting on the estate tax or other tax "extenders."  Though that means the enhanced tax deduction for conservation easements will expire on December 31st, it is very likely Congress will renew the incentive in 2010 and make it retroactive to January 1st (as happened in 2008). Clarification: Even if Congress fails to renew the incentive, easements will still be deductible under the old limits: 30% of income, 5-year carry-over.

We're optimistic Congress will to act early in the year, but it's not possible to predict exactly when.  We realize this uncertainty is a terrible burden on land trusts and landowners; that's why we've been working so hard to make the incentive permanent!

Visit Your Senators and Representatives In-district and Wish Them Happy Holidays

The silver lining of Congressional inaction in 2009 is that they will have a number of tax items demanding action early in 2010 -- any one of which could become a vehicle for making the easement incentive permanent.  Your Senators and Representatives will be back home soon, and now is a great time to wish them happy holidays and thank them for co-sponsoring H.R. 1831 or S. 812, or for anything they've done to help your land trust!  After a bruising year of partisan head-butting, a kind word will be appreciated.  Don't forget to let them know that the incentive expiring -- even if only for a few months -- is a problem for the landowners you work with.

Visit their websites at www.house.gov and www.senate.gov.  Some members post a schedule of holiday events they're hosting, but more often you'll see options to hear about events by subscribing to email updates, "friending" them on Facebook or "following" them on Twitter.  Perhaps more importantly, you'll find numbers for their district offices.  Call and tell them you represent an organization in the district -- you may be able to arrange a private meeting or get invited to events not open to the general public. Click here for fact sheets you can share with your Members of Congress.

Estate Tax Repeal Comes with Uncertainty

Without Congressional action, it appears that the estate tax will go to zero on January 1st.  Most Democrats will want to act quickly to re-establish an estate tax, and legislation to do so could provide an opportunity to pass the easement incentive and other estate tax incentives for conservation.

In the meantime, repeal could complicate estate planning for some farm and ranch families.  With the estate tax in place, heirs benefit from "stepped up basis," meaning that the basis of inherited property for heirs has been the property's value at the time of inheritance.  But "stepped up basis" is disappearing along with the estate tax, leaving in place a new and complicated tax regime for heirs.  We will provide the details early next year. Clarification: Capital gains taxes would only be due when assets are sold, not at the time of inheritance.

Thank You!

Finally, we want to thank you for everything you've done to support this effort, and for everything else you've done for conservation in 2009.  We are very grateful to be able to work with you.

With your help, we far exceeded our goal of 218 House co-sponsors for HR 1831. That total now stands at 264 and we've recruited 40 co-sponsors for S. 812 in the Senate!   And we've won more and more friends in the sportsmen's, agricultural, and environmental communities -- and in many other corners as well.

Thank you, again!

Have a great holiday season!

See you in the new year!

H.R. 1831 and S. 812 Co-sponsors Added Since Last Update:

  • Rep. Eddie Bernice Johnson (D-TX/30th)
  • Rep. Alan Mollohan (D-WV/1st)
  • Senator Tim Johnson (D-SD)
  • Senator Carl Levin (D-MI)

Click here for the full list.


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