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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.

Conservation Incentive and Solid Tax Reform

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.

Current Status and Future Prospects

In January 2013, Congress renewed the enhanced easement incentive through the end of 2013 and retroactve to January 1, 2012. But it expired again 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.

Senators Max Baucus (D-MT), Charles Grassley (R-IA) and Jon Tester (D-MT) have introduced similar legislation in the Senate (S. 339), with 15 cosponsors.

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 National Coalition

A diverse list of more than 65 national agricultural, conservation, and sportsmen’s organizations support making this important conservation tool permanent:

American Bird ConservancyNational 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
Trout Unlimited
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
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Advocates Alerts

November 6: With only eight weeks remaining before Congress adjourns (of which Congress will be in Washington for only four), there is limited time to act. Ask your senators to urge their party’s leadership to include the charitable package in any year-end tax legislation. We’ve been meeting with Senate offices and have been encouraged by their willingness to consider making some tax extenders permanent. This puts us in a good position, but we need you to reinforce that special places are being lost because the incentive has expired. Learn more »

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Congress wrestles with tax breaks for open space

July 29, 2014 | Poughkeepsie Journal | NY

House passes Gerlach conservation tax break bill, now up to Senate

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The Time is Now for Congress to Act on Conservation

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

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