Conservation Easements
If you want to continue to own your land, yet guarantee that it will not be subdivided or developed in undesirable ways; and if you and your family would like to realize a deduction in federal income tax or estate taxes, an easement is a great conservation tool for you to explore. Our Foundation is always eager to help landowners ensure long- term protection for Tennessee’s land.
If you own land with important natural, cultural, or historical resources, now may be a favorable time to donate a conservation easement. You can conserve the land you love and protect Tennessee’s natural heritage, while maintaining your private property rights and potentially realizing significant federal tax benefits.
If you own land with important natural, cultural, or historical resources, now may be a favorable time to donate a conservation easement. You can conserve the land you love and protect Tennessee’s natural heritage, while maintaining your private property rights and potentially realizing significant federal tax benefits.
In December, 2010, Congress approved an extension of tax incentives for conservation easements, retroactive to January 1, 2010 and extending through December 31, 2011. These incentives increase the deduction for donating a conservation easement from 30% of adjusted gross income to 50%, as well as extending the carry-forward period for tax deductions from 6 to 16 years. Legislation introduced in both houses of Congress will make these incentives permanent, but if lawmakers do not act in time the incentives will “sunset” at the end of 2011.
Depending on the terms to which you agree, you can still farm it, live on it, hunt it, leave it to your heirs, or sell it. Almost always, the rights to subdivide and develop the property beyond its present condition are limited or given up through a conservation easement, although limited residential lots or other structures may be allowed. Every easement is unique to the property and the donor’s interest. The easement terms that protect the property will ride with the deed in perpetuity, keeping the land protected for future generations. A conservation easement is a great way, and often the simplest and most efficient way, for parents to pass down property to their children.
In addition to having the satisfaction of protecting your land’s conservation values for posterity, you may qualify to receive an income tax deduction. When you donate a conservation easement, as long as something is conserved that is important for the environment – as long as some development privilege is “given up” – it will likely qualify as a charitable gift. In most cases, significantly restricting the number of home sites permitted on the land lowers its “market value,” or the price for which it could be sold on the open market; and the difference between the fair market value as development land versus the restricted value caused by limiting the number of home sites can be claimed as an income tax deduction. Of course, everyone’s tax situation is unique so we strongly recommend that you consult your own tax advisor.
We are aware that some of the terminology of land protection may be unfamiliar, so contact us with questions or concerns. We have published a booklet, “Landowner’s Options,” which details conservation easements and other means to protect private property. There are other options that may suit your goals for your land. This helpful booklet is an excellent guide to help you determine how you can preserve your property for future generations through conservation easements and other methods.
You Still Own the Land
Depending on the terms to which you agree, you can still farm it, live on it, hunt it, leave it to your heirs, or sell it. Almost always, the rights to subdivide and develop the property beyond its present condition are limited or given up through a conservation easement, although limited residential lots or other structures may be allowed. Every easement is unique to the property and the donor’s interest. The easement terms that protect the property will ride with the deed in perpetuity, keeping the land protected for future generations. A conservation easement is a great way, and often the simplest and most efficient way, for parents to pass down property to their children.
How an Easement Can Benefit You
In addition to having the satisfaction of protecting your land’s conservation values for posterity, you may qualify to receive an income tax deduction. When you donate a conservation easement, as long as something is conserved that is important for the environment – as long as some development privilege is “given up” – it will likely qualify as a charitable gift. In most cases, significantly restricting the number of home sites permitted on the land lowers its “market value,” or the price for which it could be sold on the open market; and the difference between the fair market value as development land versus the restricted value caused by limiting the number of home sites can be claimed as an income tax deduction. Of course, everyone’s tax situation is unique so we strongly recommend that you consult your own tax advisor.
How to Find Out More - Landowner’s Options
We are aware that some of the terminology of land protection may be unfamiliar, so contact us with questions or concerns. We have published a booklet, “Landowner’s Options,” which details conservation easements and other means to protect private property. There are other options that may suit your goals for your land. This helpful booklet is an excellent guide to help you determine how you can preserve your property for future generations through conservation easements and other methods.
Please contact Nora Beck (nora@tenngreen.org) to order a print copy.
For more information about easements, please contact
Kathleen Williams (kathleen@tenngreen.org)
Download a digital copy of our Landowner's Options Manual for later viewing.
