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.
- 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