What are the tax benefits of a conservation easement?
Potentially four different tax benefits are associated with a conservation easement: federal and state income tax benefits, a reduced estate value, and lower real estate taxes. If a conservation easement satisfies the Internal Revenue Code requirements, the grantor may receive a federal charitable income tax deduction and a Colorado state tax credit for donating a conservation easement. For estate tax purposes, the granting of an easement generally lowers the market value for the property. When property in an estate is subject to a conservation easement, the adjusted asset value for the property reduces its federal estate tax burden. In Colorado, the law stipulates that easements placed on lands with an agricultural tax basis must be forever assessed at agricultural levels despite changes in future use. Because the potential tax benefits of an easement are quite complicated, an landowner considering an easement should consult with his or her tax advisors and not rely on general stateme
