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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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June 12: In Historic First, Conservation Tax Incentive Approved by Committee

We are one step closer to making the incentive permanent, but we now need to convince House leadership that this is a priority for their members and should be brought to the floor for a vote ASAP. Please consider signing your land trust onto this letter by Independent Sector asking all members of the House to vote for the conservation tax incentive and two other charitable provisions.
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