Conservation Easements (Individual)
Land owners can receive a charitable contribution tax deduction by entering into a voluntary, legal agreement that permanently limits uses of the land.
Commonly referred to as syndicated conservation easement, conservation restriction, conservation agreement, land conservation easement and conservation easement deduction.
Do I Qualify for the Conservation Easements (Individual)?
If you own land, you can enter into a voluntary conservation easement agreement to permanently limit the uses of the land and receive a charitable contribution tax deduction.
2022 Conservation Easements (Individual) Details
To encourage preservation of natural land, Congress added a charitable deduction for individuals who choose to enter into a legally binding, permanent agreement to restrict the use and development of their land.
What is a Conservation Easement?
A conservation easement is a voluntary, legal agreement that limits use of the property owner’s land in order to protect its conservation values. Also known as a conservation restriction or conservation agreement, a conservation easement is one way to protect a property for future generations. In general, the agreement dictates that the land cannot be developed and is typically permanent, though in some cases it may be for a term of years.
What are the tax benefits of a Conservation Easement?
By designating the land or a section of the land into the conservation agreement, the property owner can take a charitable deduction for the value of the land, creating a valuable tax benefit. COVID relief acts increased the charitable contribution limits to 50% of income (note, it was temporarily increased during 2020 and 2021). For farmers, the limitation is always 100% of AGI.
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Benefits
• Reduces taxable income.
• Provides a perpetual buffer around the property.
Considerations
• Third-party financial advisor will need to be involved in the transaction.
• Potentially high risk of being audited.
• Appraisal will be required.
• Irrevocable.
Assumptions When Taking the Conservation Easements (Individual)
• None noted.
Conflicting Strategies
• None noted.
Requirements to Claim the Conservation Easements (Individual)
• Appraisal of the property is required.
Business Entities That Can Claim the Conservation Easements (Individual)
• Individual
The material discussed on this page is meant for general illustration and/or informational purposes only and is not to be construed as investment, tax, or legal advice. You must exercise your own independent professional judgment, recognizing that advice should not be based on unreasonable factual or legal assumptions or unreasonably rely upon representations of the client or others. Further, any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.