How the Easement Incentive Works
Thanks to the hard work of Senator Max Baucus (D-MT), along with land trusts and coalition partners around the country, on August 3, 2006 the Congress approved a tremendous expansion of the federal tax incentive for conservation easement donations. This was a great victory for conservation!
In 2006 and 2007 the tax incentive helped America’s land trusts increase the pace of land conservation by at least 535,000 acres compared to the previous two years! The law:
- Raises the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%;
- Allows qualified farmers and ranchers to deduct up to 100% of their AGI; and
- Increases the number of years over which a donor can take deductions from 6 years to 16 years.
These changes enable family farmers, ranchers, and other moderate-income landowners to get a significant tax benefit for donating a conservation easement on their land. Under prior law, an agricultural landowner earning $50,000 a year who donated a conservation easement worth $1 million could take a total of no more than $90,000 in tax deductions! Under the new law, that landowner can take as much as $800,000 in tax deductions – still less than the full value of their donation, but a significant increase.
The 2006 law also set higher standards for appraisers and appraisals of all donated property, and set higher penalties for abusive appraisals. Conservationists supported this to ensure the integrity of the charitable donation process. The law also tightened restrictions on donations of easements to protect historic buildings. These reforms did not expire at the end of last year.
In January 2013, Congress renewed the enhanced easement incentive through the end of 2013 and retroactve to January 1, 2012. Unless congress acts again, it will expire December 31, 2013.
Recognizing that this cycle of of hurry-up-and-wait is frustrating to landowners and slows the pace of conservation, Representatives Jim Gerlach (R-PA) and Mike Thompson (D-CA) are planning to introduce legislation to make the easement incentive permanent. That bill currently has more co-sponsors than any other tax bill in Congress, including majorities of Republicans and Democrats. See the latest list.
Both President Bush’s FY 2009 budget and President Obama’s FY 2010-13 budgets support extending the incentive. The Joint Committee on Taxation has scored a permanent easement incentive as costing $761 million over ten years.
View a fact sheet you can use.
A diverse list of more than 65 national agricultural, conservation, and sportsmen’s organizations support making this important conservation tool permanent:
|American Bird Conservancy||National Council of Farmer Cooperatives|
|American Bird Conservancy||National Rifle Association|
|American Farm Bureau Federation||National Shooting Sports Foundation|
|American Farmland Trust||National Trust for Historic Preservation|
|American Fisheries Society||National Wild Turkey Federation|
|American Forest Foundation||National Wildlife Federation|
|American Land Conservancy||National Woodland Owners Association|
|American Quarter Horse Association||NatureServe|
|American Sportfishing Association||North American Grouse Partnership|
|Archery Trade Association||Open Space Institute|
|Association of Fish & Wildlife Agencies||Pacific Forest Trust|
|Partnership of Rangeland Trusts|
|Berkley Conservation Institute||Pheasants Forever|
|Boone & Crockett Club||Pope & Young Club|
|Bowhunting Preservation Alliance||Quail Unlimited|
|Breeders’ Cup Limited||Quality Deer Management Association|
|California Association of Winegrape Growers||Rocky Mountain Elk Foundation|
|Campfire Club of America||Safari Club International|
|Civil War Preservation Trust||Scenic America|
|Congressional Sportsmen's Foundation||Texas Wildlife Association|
|Conservation Force||The Conservation Fund|
|Defenders of Wildlife||The Nature Conservancy|
|Delta Waterfowl Foundation||The Trust for Public Land|
|Ducks Unlimited||The Vital Ground Foundation|
|Environmental Defense Fund||The Wildlife Society|
|Equine Land Conservation Resource||Theodore Roosevelt Conservation Partnership|
|Humane Society Wildlife Land Trust
||Thoroughbred Owners & Breeders Association|
|Izaak Walton League of America
|Land Trust Alliance
||United States Equestrian Federation|
|Masters of Foxhounds Association
||U.S. Forest Capital|
|Mule Deer Foundation||Whitetails Unlimited|
|National Association of Conservation Districts
||Wild Sheep Foundation|
|National Audubon Society||Wildlife Forever|
|National Cattlemen’s Beef Association||Wildlife Management Institute|
|National Conference of State Historic Preservation Officers||Winegrape Growers of America|