How to Use the Enhanced Easement Incentive
The enhanced easement incentive expired December 31, 2009, but we believe it's very likely Congress will renew it in 2010 and make it retroactive to January 1st. (The Senate just passed this!) Even if Congress fails to act, conservation easement donations are still deductible, but deductions would be limited to 30% of the donor's adjusted gross income with a 5-year carry-over. C-corporations deductions will be limited to 10% of their AGI and, under a separate expired provision, S-corporation shareholder deductions are limited to their basis in the donated property. The 2006 appraisal rules do not expire.
We're optimistic the incentive will be renewed, so this page includes resources on how to use this valuable conservation tool.
If you own land with important natural or historic resources, donating a voluntary conservation easement can be one of the smartest ways to conserve the land you love, while maintaining your private property rights and possibly realizing significant federal tax benefits.
The enhanced incentive:
- Raises the deduction a donor can take for donating a conservation easement from 30 percent of his or her income in any year to 50 percent;
- Allows qualifying farmers and ranchers to deduct up to 100 percent of their income; and
- Extends the carry-forward period for a donor to take tax deductions for a voluntary conservation agreement from 5 to 15 years.
This is a powerful tool for allowing modest-income donors to receive greater credit for donating a very valuable conservation easement on property they own. For land trusts, this translates to the possibility of protecting much more land through the use of conservation easements.
It is important to note that the incentive only applies to easements donated between 2006 and 2009. The Land Trust Alliance is working to make this change permanent -- but we need your help and support.
Visit our Tax Incentive campaign page to learn what you can do to make the incentive permanent.
Key Resources | Bill Text & Regulations | Perspectives & Analysis
Resources from the Land Trust Alliance
- Brochure: Using the Enhanced Conservation Tax Incentive
The Land Trust Alliance has created an updated brochure to help everyone understand the incentive. - Frequently Asked Questions About the Enhanced Incentive
Answers questions like: Who Qualifies? What are the restrictions? Will this make appraisals more expensive? - Federal Tax Regulations for All Conservation Contributions
A more detailed guide to the regulations applicable to donations of land and conservation easements. - Compilation of IRS Guidance on the Conservation Tax Incentive
The Land Trust Alliance submitted a letter to the IRS requesting further guidance on outstanding questions regarding the expanded tax incentive for donations of conservation easements. - Find a Land Trust
Are you ready to take the next step towards conserving your land? You'll want to find a land trust to work with in your community.
Bill Text, Government Regulations and Resources
- Relevant text of the 2008 Farm Bill
- Relevant text of the 2006 pensions bill
- 2006 Changes to Federal Law Affecting Donations of Conservation Easements
- IRS Guidance on Appraisals and Appraisers
- Broader Description of the IRS Guidance
- U.S. Treasury Regulations on Qualified Conservation Contributions
Perspectives and Analysis on the Enhanced Incentive
- Stephen J. Small's Perspective (PDF; 38 KB)
- Bill Hutton's Perspective (PDF; 52 KB)
The Independent Sector:
The National Trust for Historic Preservation:
Need more detail? Our Federal Tax Regulations page provides (almost) everything you need to know...
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