What are the income tax benefits of donating a conservation easement?
Qualifying gifts of conservation easements are treated by the IRS like any other charitable gift. The value of the easement can be deducted against income taxes in the year in which it is granted; if any of the gift value remains undeducted, it can be carried forward against tax liability for up to five more years. The value of the conservation easement must be independently appraised for tax purposes. To qualify as a tax-deductible charitable gift under IRS rules, a donated conservation easement must meet three basic tests: It needs to be perpetual in duration; it must be donated exclusively for “conservation purposes”; and the grantee must be a qualified conservation organization, like the Pacific Forest Trust, or a public agency empowered to accept conservation easements. Internal Revenue Code Section 170(h) defines the necessary “conservation purposes” of an easement to include at least one of the following: The preservation of land areas for outdoor recreation by, or the education
