Take Action

Help Save the Enhanced Easement Incentive!

 

Learn More
Policy Principles
 
You are here: Home / Policy Action / Tax Acknowledgment Letter

Tax Acknowledgment Letter

IRS Requesting Additional Documentation

In recent audits, the IRS has asked conservation easement donors to provide them “contemporaneous written substantiation” of their donations from their donee.  If you are not providing such a letter to conservation easement donors, you should! – it is far easier to write a short and simple letter for your donor than to have to explain to your donor why you didn’t.

Donors taking a tax deduction for their gift are required to obtain “contemporaneous written substantiation” for a charitable contribution of $250 or more.  In short, donors need to get a letter (or email) from the charity acknowledging the gift.

To be "contemporaneous" the written substantiation must generally be in the donor’s hands before they files their tax return for the year the contribution is made. If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the letter must include a good faith estimate of the value of the goods or services the donee provided.  This most commonly happens in a “bargain sale” of land or a conservation easement to a land trust.

The donee is not required to record or report this information to the IRS on behalf of a donor. The donor is responsible for requesting and obtaining the written acknowledgment from the donee. Although there is no prescribed format for the written acknowledgment, it must provide sufficient information to substantiate the contribution. For more information, see Publication 1771.

Examples of donor acknowledgment letters from Vermont Land Trust:

Detailed rules for contemporaneous written acknowledgments are contained
in Section 170(f)(8) of the Internal Revenue Code and Section 1.170A-13(f) of the Income Tax Regulations.

Detailed rules for written disclosure statements (detailing any “quid pro quo” received by the charity, such as the payment in a bargain sale situation) are contained in Section 6115 of the Internal Revenue Code and Section 1.6115-1 of the Income Tax Regulations. The penalty rules are contained in Section 6714 of the Code. All of this information can be found on the IRS Web site at www.irs.gov .

Questions? Call Land Trust Alliance at 202-638-4725, or email us at policy@lta.org

Document Actions
Bookmark and Share
Advocates Alerts

July 10: House Vote on Conservation Tax Incentive Coming Soon

The House of Representatives will vote on the Conservation Easement Incentive Act, perhaps as early as next week. Whether you use this incentive or not, this is an unprecedented opportunity for the entire House of Representatives to vote specifically on whether or not to help land trusts. Every vote will count, and we urge you to call your congressional office and ask your representative to support H.R. 2807 when it comes to the floor – and to get as many others as possible in your land trust and its local partners to do the same.
Learn more »

View Past Alerts Sign-up Now
News
»
House passes Gerlach conservation tax break bill, now up to Senate

July 18, 2014 | The Mercury News | Pottstown, PA

»
The Time is Now for Congress to Act on Conservation

July 15, 2014 | Politico | Washington, D.C.

»
Farm bill merges 2 land programs

March 3, 2014 | Cortez Journal | CO

eNews Sign-up » More News »
 

1660 L St. NW, Suite 1100, Washington, DC 20036 info@lta.org ©Copyright 2014 Land Trust Alliance

Privacy Policy | Photo Credits | Site Map | Contact Us