Federal Income Tax Deductions of Conservation Easements
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.
In many case, landowners that donate conservation easements can receive significant federal income tax benefits in the form of charitable deductions that are based upon the economic benefits given up as a result of the land use restrictions associated with the easement. For charitable contributions by individuals of property other than cash, the amount of the deduction a taxpayer may claim is subject to percentage limitations based on: (i) the type of property donated, (ii) the type of qualified organization to which the gift is made, and (iii) the use of the property by the qualified organization. The amount of a contribution in property (including conservation easements) is the donated property’s fair market value.1 For most individuals, the amount of the charitable contribution deduction from the donation of a conservation easement to a qualified organization is limited to thirty percent of the individual’s contribution base (i.e., adjusted gross income, computed without regard to any net operating loss carry-back), over the amount of all other allowable charitable contributions for that year, with a carryover period of five years.2
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.
1 Treas. Reg. §1.170A-1(c)
2 IRC §170(b)(1)(C)-(E)
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