The Environmental Impact of a Conservation Easement
From: Conservation Easements: The Federal Tax Rules and Special Considerations Applicable to Syndicated Transactions
By: Bryan Mick, JD, MBA and Bradford Updike, JD, LLM
Mick Law P.C.
The United States Congress determined years ago that it was in the country’s best interest to preserve land of ecological or historic importance in a manner that protects conservation values identified by Congress as being important. To accomplish this, the Code provides significant federal income tax benefits to those who voluntarily restrict their property in a manner that preserves significant conservation values on their property in perpetuity. The federal income tax benefits provided by the Code for these restrictions are found in sections 170(a) and (h). The federal estate tax rules that apply to such easements are also found in sections 2031(c) and 2055(f).
As ninety-five percent of all endangered species of plants and wildlife are reported as living on privately-owned lands, the public policy that encourages private land owners to grant conservation easements to land trusts organized as federal tax exempt organizations and governmental agencies is well established.1 Historically, these easements have protected millions of acres of wildlife habitat and open space.2 The National Conservation Easement Database reports that 114, 216 conservation easements cover 23.349 million acres of land in the United States (July 2015 data). According to the Land Trust Alliance, a nationwide association of land trusts in the 48 contiguous U.S. states, there are twice as many acres subject to conservation easements on private lands as compared with lands situated within National Parks.3 The vastness of land covered by such protective easements has also translated to several billion dollars in income tax savings to donors.4
Bryan S. Mick is the President of Mick Law P.C. in Omaha, Nebraska, and a provider of independent due diligence legal services for various broker-dealers and registered investment advisors throughout the country.
Brad Updike joined Mick Law in August 15, 2006, and his areas of practice include securities law, oil and gas, private equity, conservation real estate, DPP due diligence, taxation analysis relating to securitized financing, and securities advertising practices. On a local level, Mr. Updike has also served the legal needs of Omaha-based clients on matters relating to estate planning, private placements, trademark law, and 501(c)(3) non-profit taxation matters.
Bryan Mick, Bradford Updike, Mick Law P.C., SANDLAPPER Securities, LLC, Sandlapper Wealth Management, LLC, and TRIPS are unaffiliated.
1A.M. Merenlender, et. al., Land Trusts and Conservation Easements: Who is Conserving What for Whom? 18 Conservation Biology, Feb. 2004, at 66.
2National Cosnervation Easement Database, http://conservationeasement.us (last visited Sept. 24, 2015).
3 Damon Arthur, Conservation Easements and Land Trusts Growing Trend in North State, Redding, Sept. 27,2012, http://www.redding.com/news/conservation-easements-and-land-trusts-growing.
4 Deal, supra note 3.
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