Conserve Your Land

Protecting the Place You Love

GETTING STARTED

Protecting your land can be deeply meaningful. It’s also a big decision. You probably have a lot of questions. For starters, you might want to check out our FAQs about conservation easements. You may also want to learn about other conservation options.

QUESTIONS TO CONSIDER

As you think about protecting your land, it’s helpful to to have a clear sense of your needs and goals. The answers to questions like these can help determine the conservation options that will work best for you.

  • What is it about the land that’s important to you?
  • What are its special natural, agricultural, scenic or historic features?
  • Is it important to you to protect the whole parcel or a specific part of it?
  • How do you plan to use the land in the future?
  • Do you plan to continue owning the land?
  • Do you plan to continue living on the land?
  • Do you plan to pass the land on to someone in your family?
  • Do you need to sell all or part of the land?
  • Is it important to you to reduce your income taxes?
  • Are you interested in reducing potential estate taxes?
  • Are you interested in reducing your property taxes?
  • Will you owe substantial capital gains taxes if you sell the land?
  • Do you want to be able to construct any additional buildings on the property?
  • Do you want to be able to sell any building lots in the future?

 

GETTING ADVICE

We want to help answer your questions and guide you through the process of protecting your land. As you make decisions, you should also consult with your own qualified, independent legal and financial advisors. And, of course, it’s important to talk these decisions through with all family members who will be affected.

Easment FAQs

What is a conservation easement?
The most common way to protect land is by “conservation easement.” A conservation easement is a voluntary legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values. Landowners retain many of their rights, including the right to own and use the land, sell it and pass it on to their heirs.
What are the benefits of conservation easements?
Conservation easements allow people to protect the land they love. They are the number one tool available for protecting privately owned land. All conservation easements must provide public benefits, such as water quality, farm and ranch land preservation, scenic views, wildlife habitat, outdoor recreation, education, and historic preservation.
How does a conservation easement restrict use of the land?
That depends on what you’re trying to protect. If you’re placing land under easement, you can work with your land trust to decide on terms that are right for the land and right for you. For example, if it’s important to you to be able to build a home on the land or to subdivide your property, you may be able to reserve those rights — as long as you’re still protecting important conservation values (such as productive farmland or wildlife habitat).

You can use an easement to protect your whole property or part of it. While every easement is unique, there are a few general rules. Farming and ranching are usually permitted. Development is almost always limited. Surface mining is almost always off-limits. While some easements require public access, many do not.

Can I sell a conservation easement?
Most conservation easements are donated. But if your land has very high conservation value, your land trust may be willing to raise funds to purchase an easement. In particular, a number of federal, state, and local programs provide funding to purchase easements on farm and ranch land.
Can a conservation easement reduce my income taxes?
A conservation easement donation can result in significant tax benefits, if it meets the requirements of federal law. It may lower your federal income tax, because you can claim the value of the easement as a tax-deductible charitable donation. It may also lower your state income tax, depending on your state laws.
Can a conservation easement help with estate planning?
Yes. Often, one of the biggest advantages of a conservation easement is that it helps you pass on your land to the next generation. A conservation easement helps you plan for the future of the land and it can significantly lower your estate taxes.
How much land is protected by conservation easements?
More every year! Conservation easements are becoming very popular, in part because of their flexibility working with landowners to achieve their goals. As of 2010, nearly 9 million acres in the United States were protected by state and local land trusts through conservation easements.
How do I put a conservation easement on my land?
Start by talking with Pure Midway to see if we are a good fit for your project. Talk to us about the conservation values you want to protect and how you want to use the land. Be sure to talk with family members as you consider your conservation options. This is a big decision, so it’s important to consult with your attorney and financial advisors, too.
Are conservation easements permanent?
In most cases, yes. Most easements “run with the land,” meaning that all not only the original owner but all owners that come after them are subject to the easement. A few conservation programs use temporary easements — but only permanent conservation easements qualify for income and estate tax benefits.
What is the role of Pure Midway?
It’s Pure Midway’s job to make sure that the restrictions described in the easement are actually carried out. To do this, Pure Midway monitors the property on a regular basis, typically once a year. Pure Midway will work with you and all future landowners to make sure that activities on the land are consistent with the easement. If necessary, Pure Midway is responsible for taking legal action to enforce the easement.
Do I need to make a stewardship contribution?
It depends. When a land trust agrees to hold a conservation easement, they take on significant stewardship responsibilities. Most land trusts maintain a stewardship fund to make sure they’ll be able to carry out these responsibilities. Often, land trusts ask easement donors to contribute to this fund. But, usually, the amount of the stewardship contribution is more than offset by the tax incentives for donating the easement.

Flexibility

Landowners have found that conservation easements offer great flexibility, yet provide a permanent guarantee that the land will not be developed. For example, an easement on property containing rare wildlife habitat might prohibit any development, while one on a farm might allow continued farming and the building of additional agricultural structures. An easement may apply to only a portion of the property, and need not require public access.

A landowner may sell a conservation easement, but usually easements are donated. If the donation benefits the public by permanently protecting important conservation resources and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation. The amount of the donation is the difference between the land’s value with the easement and its value without the easement. Placing an easement on property may or may not result in property tax savings.

 From the Land Trust Alliance Website:

What is a conservation easement?

conservation easement is a voluntary legal agreement between a

landowner and a land trust or government agency that permanently

limits uses of the land in order to protect its conservation values.

Landowners retain many of their rights, including the right to own and use the

land, sell it and pass it on to their heirs.

What are the benefits of conservation easements?

Conservation easements allow people to protect the land they love. They are the

number one tool available for protecting privately owned land. All

conservation easements must provide public benefits, such as water

quality, farm and ranch land preservation, scenic views, wildlife

habitat, outdoor recreation, education, and historic preservation.

How does a conservation easement restrict use of the land?

That depends on what you’re trying to protect. If you’re

placing land under easement, you can work with your land trust to

decide on terms that are right for the land and right for you.

For example, if it’s important to you to be able to build a home on

the land or to subdivide your property, you may be able to reserve

those rights — as long as you’re still protecting important

conservation values (such as productive farmland or wildlife

habitat). You can use an easement to protect your whole property or

part of it.

While

every easement is unique, there are a few general rules. Farming and

ranching are usually permitted. Development is almost always limited.

Surface mining is almost always off-limits. While some easements

require public access, many do not.

Can I sell a conservation easement?

Most conservation easements are donated. But if your land has very high

conservation value, your land trust may be willing to raise funds to

purchase an easement. In particular, a number of federal, state, and

local programs provide funding to purchase easements on farm and

ranch land.

Can a conservation easement reduce my income taxes?

conservation easement donation can result in significant tax

benefits, if it meets the requirements of federal law. It may lower

your federal income tax, because you can claim the value of the

easement as a tax-deductible charitable donation. It may also lower

your state income tax, depending on your state laws.

Can a conservation easement help with estate planning?

Yes.

Often, one of the biggest advantages of a conservation easement is

that it helps you pass on your land to the next generation. A

conservation easement helps you plan for the future of the land and

it can significantly lower your estate taxes.

Are conservation easements permanent?

In most cases, yes. Most easements “run with the land,”

meaning that all not only the original owner but all owners that come

after them are subject to the easement. A few conservation programs

use temporary easements — but only permanent conservation easements

qualify for income and estate tax benefits.

How much land is protected by conservation easements?

More every year! Conservation easements are becoming very popular, in part

because of their flexibility working with landowners to achieve their

goals. As of 2010, nearly 9 million acres in the United States were

protected by state and local land trusts through conservation

easements.

How do I put a conservation easement on my land?

Start by talking with Pure Midway to see if we are a good fit for your

project. Talk to us about the conservation values you want to protect

and how you want to use the land. Be sure to talk with family members

as you consider your conservation options. This is a big decision, so

it’s important to consult with your attorney and financial

advisors, too.

What is the role of Pure Midway?

It’s Pure Midway’s job to make sure that the restrictions described

in the easement are actually carried out. To do this, Pure Midway

monitors the property on a regular basis, typically once a year.

Pure Midway will work with you and all future landowners to make sure

that activities on the land are consistent with the easement. If

necessary, Pure Midway is responsible for taking legal action to

enforce the easement.

Do I need to make a stewardship contribution?

It depends. When a land trust agrees to hold a conservation easement,

they take on significant stewardship responsibilities. Most land

trusts maintain a stewardship fund to make sure they’ll be able

to carry out these responsibilities. Often, land trusts ask easement

donors to contribute to this fund. But, usually, the amount of the

stewardship contribution is more than offset by the tax incentives

for donating the easement.

Learn More at:

http://www.landtrustalliance.org/what-you-can-do/conserve-your-land/questions

Overview of Benefits for Landowners From Land Trust Alliance Website:

Landowners have found that conservation easements offer great flexibility, yet

provide a permanent guarantee that the land will not be developed.

For example, an easement on property containing rare wildlife habitat

might prohibit any development, while one on a farm might allow

continued farming and the building of additional agricultural

structures. An easement may apply to only a portion of the property,

and need not require public access.

landowner may sell a conservation easement, but usually easements are

donated. If the donation benefits the public by permanently

protecting important conservation resources and meets other federal

tax code requirements, it can qualify as a tax-deductible

charitable donation.

The amount of the donation is the difference between the land’s

value with the easement and its value without the easement. Placing

an easement on property may or may not result in property tax

savings.

Perhaps most importantly, a conservation easement can be essential for

passing land on to the next generation. By removing the land’s

development potential, the easement lowers its market value, which in

turn lowers estate tax. Whether the easement is donated during life

or by will, it can make a critical difference in the heirs’

ability to keep the land intact.

TAX BENEFITS Overview:

Tax Incentives: A Key to Conservation Success

Federal tax policies have a huge impact on how much land we’re able to

protect. Tax incentives for land conservation offset part of the loss

in property value when a landowner donates an easement, which makes

conservation a viable option for more landowners. Tax incentives for

voluntary land conservation have proven to be hugely successful,

helping land trusts to protect over 50 million acres nationwide.

Federal Income Tax Benefits

One of the most significant tax incentives is the federal income tax

deduction, which Congress made permanent in 2015. This powerful tool

allows modest-income donors to receive greater credit for donating a

very valuable conservation easement on property they own. With the

enhanced incentive in place, the pace of conservation exceeds one

million acres per year!

Estate Tax Benefits

Estate tax incentives are another important consideration for many

landowners — especially farm and ranch families, who can be

hard hit by estate taxes. In some cases, estate taxes force families

to subdivide or sell their land. Estate tax incentives for

conservation create an alternative, which can help to keep land

intact, in production, and in the family. The Alliance helped to

create the first estate tax incentives for conservation and we keep

working to improve these incentives so they benefit more families and

help save more land.

TAX BENEFITS:

Again from the Land Trust Alliance Website:

Income Tax Incentives for Land Conservation

For landowners, donating a conservation easement is a way to protect

places they love. It’s also a major financial decision. When

landowners donate a conservation easement, they give up part of the

value of their property — often their family’s biggest

asset. Tax incentives offset some of that loss in property value,

making conservation a viable option for more landowners.

How to Use the Federal Conservation Tax Deduction

In 2015 Congress enacted one of the most powerful conservation measures

in decades: the enhanced federal tax incentive for conservation

easement donations.

The permanent conservation easement tax incentive is a powerful tool that

helps Americans conserve their land voluntarily.  

For land trusts across the country, the permanent incentive represents

vastly increased opportunities to protect the special places in their

widely varied communities.  If you own land with important natural, agricultural or historic

resources, donating a conservation easement can be a prudent way to

both save the land you love forever and to realize significant federal tax savings.

This short brochure 

http://s3.amazonaws.com/landtrustalliance.org/ConservationEasementTaxIncentiveBrochure2016.pdf

summarizes the conservation easement tax incentive and provides

answers to some frequently asked questions (also below). For the

latest information and for guidance on individual properties, please

contact Pure Midway.

Frequently Asked Questions

What is a conservation easement?

conservation easement, also called a conservation agreement, is a

voluntary and legally binding agreement between a landowner and a

land trust or government agency.

When

a landowner donates an easement to a land trust or public agency, she

or he is giving away some of the rights associated with the land. The

easement permanently limits uses of the donated parcel in order to

protect its conservation values, as specified in the Internal Revenue

Code (IRC) 170(h).

Conservation

easements offer private landowners flexibility in protecting their

land. For example, a donating landowner can retain the right to grow

crops on a parcel while, at the same time, relinquishing the right to

build additional structures on the parcel.

The

land trust is responsible for making sure that a landowner adheres to

the conservation terms of the easement. An easement may apply to all

or a portion of the property and may or may not allow for public

access to the property. A landowner who has donated a conservation

easement can sell the land or pass it on to heirs, and future owners

of the property are bound by the terms of the easement.

How

does the permanent, enhanced tax incentive work?

If

a conservation easement is voluntarily donated to a land trust or

government agency, and if it benefits the public by permanently

protecting important conservation resources, it can qualify as a

charitable tax deduction on the donor’s federal income tax

return.

First

enacted temporarily in 2006, the tax incentive was made permanent in

2015 and increases the benefits to landowners by:

Raising

the deduction a donor can take for donating a conservation easement

to 50%, from 30%, of his or her annual income;

Extending

the carry-forward period for a donor to take a tax deduction for a

conservation agreement to 15 years from 5 years; and

Allowing

qualifying farmers and ranchers to deduct up to 100% of their

income, increased from 50%.

Easements

vary greatly in value.In general, the highest easement values are

found on tracts of open space under high development pressure.In

some jurisdictions, placing an easement on one’s land may also

result in property tax savings for the landowner.

What

is an example of the financial benefit that the permanent tax

incentive provides a landowner?

Prior

to 2015, a landowner earning $50,000 a year who donated a $1 million

conservation easement could take a $15,000 deduction (30% of his or

her income) for the year of the donation and for an additional five

years, generating a total of $90,000 in tax deductions.

The

new, permanent incentive allows that landowner to deduct $25,000 (50%

of income) for the year of the donation and for each of an additional

15 years.

This

would result in a total of $400,000 in deductions. If the landowner

is a farmer or rancher, he or she can deduct $50,000 (100% of income)

in the first year and then for each of the following 15 years,

realizing a maximum of $800,000 in deductions.

Can

anyone deduct more than the value of his or her gift of an easement?

One

can never deduct more than the fair market value of the gift. The

permanent incentive simply allows landowners to deduct more of that

fair market value.

Who

qualifies as a farmer or rancher?

The

2015 law defines a farmer or rancher as someone who receives more

than 50% of his or her gross income from “the trade or business

of farming.” The law references IRC 2032A(e)(5) to define

activities that count as farming, including:

Cultivating

the soil or raising or harvesting any agricultural or horticultural

commodity (including the raising, shearing, feeding, caring for,

training and management of animals) on a farm;

Handling,

drying, packing, grading or storing on a farm any agricultural or

horticultural commodity in its unmanufactured state, but only if the

owner, tenant or operator of the farm regularly produces more than

one-half of the commodity so treated; and

The

planting, cultivating, caring for or cutting of trees, or the

preparation (other than milling) of trees for market.

For

an easement to qualify for a farmer or rancher, it must contain a

restriction requiring that the land remain “available for

agriculture.” This provision also applies to farmers who are

organized as C corporations. Additionally, Alaska Native Corporations

are eligible as farmers or ranchers.

Do

these changes apply to gifts of land?

The

expanded incentive does not apply to gifts of land in fee. It only

applies to gifts that qualify under IRC 170(h)(2), such as

conservation easements. A landowner considering the donation of land

should consult an attorney to determine whether the structure of his

or her gift should be changed to take advantage of the permanent

incentive.

When

does the permanent incentive apply?

The

permanent incentive applies to all conservation easements donated

after December 31, 2014.

What

other restrictions apply?

Conservation

easement donations must comply with “conservation purposes”

as defined in IRC 170(h). A donated easement must be a true gift. It

must protect significant natural, agricultural or historic resources

that public agencies or land trusts want to have conserved. A donated

easement cannot serve to simply prevent development on a property or

be part of a “quid pro quo” agreement in exchange for a

government action, such as issuance of a building permit or a zoning

change.

Will

donors who use this provision be audited by the IRS?

Taking

advantage of the 2015 law should not affect one’s likelihood of

being audited. However, all donors should note that the IRS does pay

attention to donations of property that are high in value, including

donations of conservation easements.

This

makes it important for donors and their advisors to know and follow

the law, utilize a reputable professional appraiser who has

experience in the appraisal of conservation easements and donate to a

reputable land trust that has adopted and implemented Land

Trust Standards and Practices.

What

is the role of Pure Midway?

Potential

easement donors should know that donating a permanent conservation

easement is a big commitment requiring careful consideration and

independent legal advice.

Donating

a conservation easement requires a working partnership with a land

trust such as Pure Midway— and time for careful drafting of

documents and maps, baseline documentation and a professional

appraisal.Landowners should understand that a land trust may

decline to accept a donation that does not meet both the legal

requirements and the land trust’s own specific charitable

mission and strategic plan. In addition, land trusts will want to see

the appraisal before accepting your gift.

How

do other laws affect easement donations?

A

2006 law (PL109-280) redefines who is a “qualified appraiser,”

so appraisers need to show donors that they are qualified under the

new law, which states that a qualified appraiser must “demonstrate

verifiable education and experience in valuing the type of property

subject to the appraisal.”

The

2006 law also tightened the rules for easements on “certified

historic structures.” If you are protecting a property that

includes such a structure, new regulations, including a filing fee

and specific appraisal requirements may apply to you.

State

Income Tax Credits for Conservation

In

addition to the federal tax deduction, 16 states offer some form of

tax credit for conservation easement donations; however Utah does not

offer any form of tax credit for conservation easement donations.