Bill Would Give Tax Benefits to Conservation-Minded Landowners

By Jason Bramwell
A bipartisan bill that would provide a permanent tax incentive to family farmers, ranchers, and other landowners who choose not to develop their land but preserve it for conservation is expected to be introduced by two lawmakers in the House of Representatives.
Congressmen Mike Thompson (D-CA) and Jim Gerlach (R-PA) said on July 23 they will introduce the Conservation Easement Incentive Act of 2013. The bill has received bipartisan support, with more than 125 lawmakers cosponsoring the Conservation Easement Incentive Act, according to Thompson and Gerlach.
A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits use of the land in order to protect its conservation values, according to the Land Trust Alliance. It allows landowners to continue to own and use their land, and they can also sell it or pass it on to heirs.
When a conservation easement is donated to a land trust, the landowner gives up some of his or her rights associated with the land. For example, the landowner would not be able to build additional structures, but retains the right to grow crops. Future owners also would be bound by the easement's terms, which are administered by the land trust.
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 Land Trust Alliance states. In some jurisdictions, placing an easement on your property may also result in property tax savings.
Thompson stated that conservation easements have already encouraged landowners to conserve millions of acres of farmland and scenic open spaces, but there's more that can be done.
"By making this important conservation tool permanent, our bill will give landowners the certainty they need to preserve and protect even more land and natural resources for future generations," he said in a written statement.
"Whether you are a farmer looking to preserve land that's been in your family for generations or a local land trust forging community partnerships to protect natural resources, this legislation gives you greater freedom to make critical choices about future land use," Gerlach added. "Our effort to make the conservation easement tax incentive permanent has generated bipartisan support because it makes sense."
The Conservation Easement Incentive Act would make permanent an enhanced tax incentive for donating development rights that would otherwise expire at the end of 2013.
The incentive's current uncertainty discourages conservation because it takes an average of three years to set up a conservation easement, the lawmakers said. Landowners who want to donate their development rights for conservation may not know if the incentive's tax benefits will be available to them by the time their conservation easement is established. Eliminating this ever-changing deadline will give more farmers, ranchers, and forest owners the assurance they need to choose land conservation over development, according to Thompson and Gerlach.
In addition, the Conservation Easement Incentive Act would help moderate-income landowners choose conservation by offering the following benefits:
  • Raising the maximum deduction a donor can take for donating a conservation easement from 30 percent of the donor's adjusted gross income (AGI) in any year to 50 percent.
  • Allowing qualified farmers and ranchers to deduct up to 100 percent of their AGI.
  • Increasing the number of years over which a donor can take this deduction from five to fifteen years.
The Conservation Easement Incentive Act has been endorsed by the Land Trust Alliance, Ducks Unlimited, National Wildlife Federation, National Cattlemen's Beef Association, American Forest Foundation, Congressional Sportsmen's Foundation, and more than fifty other groups.
The bill will be referred to the House Committee on Ways and Means, on which Thompson and Gerlach both serve, for further consideration.

You may like these other stories...

Senate Takes Different Approach from House for Highway and Bridge FundEarlier this week, according to a New York Times article, the Senate agreed to fill the coffers of the fund that pays for highway and bridge repairs with...
There it stands, your client's 100-year-old, rickety, vermin-infested barn or former hotel or whatever the darn thing once was. And she's considering what to do with it. There are two words that can help her decide...
It's not a reality—yet—but accounting software is poised to eliminate accountants. We are at a tipping point for many similar professions: online education replacing professors, legal software replacing...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.