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Highlights of Schedule D Conservation Easement Questions

Part II of Schedule D of the IRS Form 990 includes nine questions on conservation easements.

Even if you aren’t required to file a full Form 990, we suggest you look at it. The IRS is asking many of the same questions in audits – and you should be prepared to answer them!

Part IV, Line 7 of the core form asks:

Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas or historic structures? If “Yes,” complete Schedule D, Part II.

Schedule D asks a number of questions, including:

  • The purpose(s) of conservation easements held by the organization
  • Total number of conservation easements
  • Total acreage subject to conservation easements
  • Number of conservation easements on a certified historic structure
  • Number of conservation easements on historic structures acquired after August 17, 2006 that are not listed on the National Register
  • Number of conservation easements modified, transferred, released, extinguished or terminated by the organization during the taxable year
  • Number of states in which the organization holds a conservation easement
  • Whether the organization has a written policy regarding the periodic monitoring, inspection, handling of violations and enforcement of the conservation easements it holds
  • Number of staff or volunteer hours devoted to monitoring, inspecting and enforcing easements during the year
  • Amount of expenses incurred in monitoring, inspecting and enforcing easements during the year
  • Whether each easement acquired after August 17, 2006 satisfies the requirements of 170(h)(4)(B)(i) and (ii) (these are the special rules with respect to easements on buildings in registered historic districts)
  • How the organization reports conservation easements in its revenue and expense statements and balance sheet

Schedule D: More Information

  • Reporting is limited to conservation easements and other interests in real property that have attributes similar to a conservation easement and are established for the purpose of conservation and preservation (for example, certain restrictive covenants and equitable servitudes (not all easements, such as utility easements)
  • Reporting of acreage under easement at end of year is limited to easements eligible for a section 170 deduction
  • Asks for, if applicable, the text of the footnote to the organization’s financial statements that describes the organization’s accounting for conservation easements

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February 12: The House successfully voted 279-137, demonstrating a supermajority (67%) of support, on H.R. 644, a package of charitable incentives including the conservation tax incentive.Now we need your help in the Senate to secure co-sponsors! Sens. Heller and Stabenow have requested land trusts’ assistance in asking senators to cosponsor S. 330, the Conservation Easement Incentive Act. Learn more »

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