In December 2015, Congress passed legislation that made the federal enhanced easement incentive permanent. In a strong bipartisan action, the House voted 318-109 and the Senate voted 65-33 to pass the bills that included the tax incentive.
The tax benefits were originally signed into law on August 3, 2006 when Congress approved a tremendous expansion of the federal tax incentive for conservation easement donations. The incentive was renewed in 2014, before being made permanent a year later.
The tax incentive has helped America’s land trusts conserve more than 2 million acres of America’s natural outdoor heritage. The law:
- 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 reap 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.
Lands placed into conservation easements continue to be farmed, grazed, hunted or used for outdoor recreation and wildlife conservation, and these lands remain on county tax rolls, which strengthens local economies.
Learn more at the Land Trust Alliance website.