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Old Lyme Conservation Trust
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Old
Lyme Conservation Trust, Inc.
P.O. Box 163
Old Lyme, CT 06371
webmail@old-lymeconservtrust.org
Tax Cut for Conservation on Private Land
Congress recently a new tax law that helps all of us interested in protecting clean water, natural areas and family farms. The law enhances the federal tax benefits for landowners who donate voluntary conservation agreements. These agreements can provide a win-win solution for protecting resources important to our community while keeping land in productive private ownership.
What Congress just did makes the tax law work much better for many modest income landowners who, under the old rules, only got credit for a small portion of the value of their donation.
To learn more about these new developments, contact us or visit www.LTA.org.
Why do we need conservation easements?
America needs voluntary, private land conservation because...
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By protecting important natural and historic resources on private land, private landowners play an important part in preserving America’s natural heritage for future generations.
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Voluntary conservation agreements, also known as conservation easements, protect fields, woodlands and working farms and make it easier for families to leave the land to their children.
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Voluntary conservation agreements respect private property rights whileproviding the public benefit of protecting America’s natural heritage.
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Private conservation donations have resulted in millions of acres being protected for farming, ranching, forestry, hunting and fishing.
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Voluntary conservation donations give individual landowners the opportunity to conserve clean water, natural areas and traditional ways of life that are important to them and their communities.
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Voluntary conservation agreements keep land on the tax rolls, preserving revenue for local schools and providing cost-effective, non-regulatory conservation.
Overview of new tax benefits
New Federal Law Gives Fairer Tax
Benefit for Voluntary Conservation Agreements
Generous landowners who donate voluntary
conservation agreements, also known as conservation easements, to the
Old Lyme Conservation Trust are inspired by many things: they love the
Town of Old Lyme, they feel connected to their land, and they wish to
leave a legacy for future generations. This inspiration is at the heart
of our work to permanently protect valuable natural resources. But for
almost all of our donors, donating a conservation easement is a major
financial decision, and the federal income tax deduction that comes with
a donation helps make easements possible for landowners in our
community.
Congress recently passed a new law that
enhances the tax benefits of protecting private land for many
landowners. The legislation improves the tax incentive for conservation
easements by allowing conservation easement donors to:
Deduct up to 50% of their adjusted
gross income in any year (up from 30%);
Deduct up to 100% of their adjusted
gross income if the majority of that income came from farming,
ranching or forestry; and
Continue to take deductions for as
long as 16 years (up from 6 years).
Congress also passed tighter appraisal
standards for such gifts, and stronger penalties for appraisers who
violate the standards.
The Land Trust Alliance (LTA) led the
effort to get Congress to approve this new law. LTA is a national
organization that sets national standards for conservation organizations
like ours, provides training and networking opportunities, and
represents the land trust community in Washington, DC. The Old Lyme Conservation
Trust has been a member of LTA for three years.
Each day we are touched by the generous
and inspired landowners who work with us. The new law will make it
easier for others in our community to build on their love of the land
and permanently protect The Town of Old Lyme.
New Federal Law Gives Better Tax Break for Voluntary Conservation Agreements
Congress recently passed a law to enhance the tax benefits of protecting
your land by donating a voluntary conservation agreement. If you own
land with important natural or historic resources, donating a voluntary
conservation agreement can be one of the smartest ways to conserve the
land you love and protect America’s natural heritage, while maintaining
your private property rights and possibly realizing significant federal
tax benefits.
These new incentives make it easier for average Americans, including working family farmers and ranchers, to donate land. The legislation allows:
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A conservation agreement donor to deduct up to 50% of their adjusted gross income in any year;
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Qualifying farmers and ranchers to deduct up to 100% of their adjusted gross income; and
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Donors to take deductions for their contribution over as many as 16 years.
These changes allow many modest income landowners to deduct much more than they could under the old rules, bringing increased fairness to the tax code.
What do you need to know to enter into a voluntary conservation agreement? Here are the facts:
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A voluntary conservation agreement, also known as a conservation easement, is a legal agreement between a landowner and a nonprofit land trust or government agency that permanently limits uses of the land in order to protect important conservation values. It allows you to continue to own and use your land and to sell it or pass it on to heirs.
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When you enter into a voluntary conservation agreement with a land trust, you give up some of the rights associated with the land. For example, you might give up the right to subdivide your land or build additional houses, while retaining the full right to grow crops. Future owners also will be bound by the agreement’s terms. The land trust is responsible for making sure the terms of the agreement are followed.
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Voluntary conservation agreements vary widely. An agreement to protect rare wildlife habitat might prohibit any development there, for example, while one on a farm might allow continued farming and the building of additional agricultural structures. An agreement may apply to just a portion of the property, and need not require public access.
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A conservation donation requires not only a willing donor, but a qualified conservation organization to accept the donation. That organization needs to be able to show that the donation closely fits its particular charitable mission. A land trust will not accept a donation that does not fit its mission and purposes.
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A voluntary conservation agreement can help a landowner pass land on intact to the next generation. By limiting the land's development potential, the agreement lowers its market value, which in turn lowers estate tax. Whether the agreement is donated during life or by will, it can make a critical difference in the heirs' ability to keep the land intact.
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If a conservation agreement 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 amount of the donation is the difference between the land's value with the agreement and its value without the agreement.
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To qualify as a charitable donation, a conservation agreement must be permanent. A landowner should get professional financial planning and legal advice before making such a major donation.
To learn more about protecting your land with a voluntary conservation agreement, call or email the Old Lyme Conservation Trust today.
Join OLCT!
Family membership is $50/year
Individual membership is $25/year
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Copyright © 2007 The Old Lyme Conservation Trust