Tax Deductible Land Donations

"Without adversely affecting current enjoyment of real property, a land owner can achieve significant economic benefits (enhanced value of surrounding property and income tax savings) by dedicating an interest in land for conservation purposes."

Curtis L Brown suggests that dedicated the entire interest in land can result in great benefits than the what is more frequently used - the conservation easement. This is because donors favor being able to retain title and use. However, simply by executed a land lease with a related entity and donating the land to a land trust (subject to lease). Brown adds that you can "achieve the same rights of use of land for [himself] and successors".

Some Highlights:
1) House Bill (HR 1831) "The Conservation Easement Incentive Act" would make permanent the special tax rules applying to all qualified conservation contributions of entire interests and remainder interests, if passed.
2) A landowner with a conservation easement can give the title (with a lease back) of the land (in part or whole) to a Land Trust and generate a second deductible contribution for the same land.
3) The same can give an undivided interest, remainder interest, or a remainder interest in an undivided interest in land subject to a conservation easement and still qualify for another contribution deduction on the same land.
4) Land dedicated for conservation purposes enhances the value of surrounding land
5) a larger tax write-off for dedicated the entire interest in a smaller tract, than for an easement on a larger tract.

Qualified Purposes
1) outdoor recreation by, or the education of, the general public
2) the protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem
3) the preservation of historically important land are a or a certified historic structure.
4) the preservation of a historically important land area or a certified historic structure

HR 1831
-introduced in March 31, 2009
-limits on deductions for conservation contributions for farmers and ranchers was only 30% with a carryover of 5 years before 2006. These before mentioned benefits were signed into law by President Bush. The expiration on this benefit is Dec 31, 2009.

Court Case Precedent(Kiva Dunes Conservation, LLC vs Commr.)
- the Tax Court allowed a $30MM federal income tax charitable contribution for a conservation easement on a golf course.

Source: Curtis L Brown (contact him 254.829.0064 or Curtis@CurtisLBrown.com)
You can learn more at CurtisLBrown.com or SustainingLandTrust.org.

Curtis Brown has over 33 years of experience in tax, business and estate planning, litigation, and trust and estate administration. Curtis Brown was born in 1951 in Dallas, Texas. Mr. Brown received his B.B.A. in Accounting from Texas Tech University in 1972. He earned his JurisDoctor degree in 1976 from The University of Texas School of Law. He also studied international comparative law at the University of Oxford, Oxford, England.