Congress just renewed the enhanced tax incentive for conservation easement donations! President Obama signed H.R. 4853, making the incentive effective through December 31, 2011 and retroactive to January 1, 2010.
How the Easement Incentive Works
On August 3, 2006 Congress approved a tremendous expansion of the federal tax incentive for conservation easement donations.
In 2006 and 2007, the tax incentive helped land trusts protect at least 535,000 acres more than the previous two years!
- Raises the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%;
- Allows qualified farmers and ranchers to deduct up to 100% of their AGI; and
- Increases the number of years over which a donor can take deductions from 6 years to 16 years.
These changes enable family farmers, ranchers, and other moderate-income landowners to get a significant tax benefit for donating a conservation easement on their land. Under prior law, an agricultural landowner earning $50,000 a year who donated a conservation easement worth $1 million could take a total of no more than $90,000 in tax deductions! Under the new law, that landowner can take as much as $800,000 in tax deductions – still less than the full value of their donation, but a significant increase.