What are the estate tax benefits of donating a conservation easement?
While estate taxes affect fewer than 2% of all taxpayers, owners of larger, well-stocked forests may find themselves in this elite group. With the rapid appreciation of land and timber values in many areas, families often don’t recognize how devastating the estate tax bill may be when the current market value of their property is factored in, as required by the IRS. If not properly planned for, this tax liability could force heirs to raise money by selling some or all of the land, or more intensively harvesting timber than planned for. A conservation easement can reduce the appraised market value of the property to reflect current forest use rather than its speculative liquidation value. In this way, the conservation easement can reduce or eliminate estate taxes. This reduction can make all the difference for families with significant forest holdings, allowing them to pass the land onto the next generation intact. The federal estate tax rate ranges from 37% for estates valued at $675,0
