How the Enhanced Tax Incentive for Conservation Easements Benefits You

By Rand Wentworth, President, Land Trust Alliance

After a year-long lapse that left many important conservation donations in limbo, Congress has renewed the enhanced tax incentive for conservation easements! As soon as President Obama signs H.R. 4853 (http://www.rules.house.gov/111/LegText/111_satohr4853_txt.pdf), the incentive will be in effect through December 31, 2011 and be retroactive to January 1, 2010.

We’d like to say a big Thank you! to each and every person who made a phone call, visited their member of Congress, financially supported our work, or otherwise played their part at the local, state or national level. This has been a true community effort which would not have been possible without our national coalition and the help of many land trusts. Your hard work made renewal of the incentive possible and has laid the groundwork for bipartisan legislation to make it permanent.

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Let’s Make the Most of This News!

We must act quickly to ensure that landowners in your land trust’s priority areas hear about this incentive. Here are 4 steps you can take immediately:

– Alert local media using our sample press release (http://www.landtrustalliance.org/policy/documents/9-Press%20Release%20Template.doc) or letter to the editor (http://www.landtrustalliance.org/policy/documents/2-ltr-to-editor)

– Spread the word to landowners with the Grassroots Toolkit (http://www.landtrustalliance.org/policy/policy-toolkit)
– Thank Congress and urge them to make this incentive permanent! (http://www.landtrustalliance.org/policy/policy-toolkit)

– Forward this alert to your board, staff, members and supporters

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Details on What Was Extended

The incentive, which now applies to donations in 2010 and 2011:

– Raises the income tax deduction a landowner can take for donating a conservation easement from 30% of their income in any year to 50%;

– Allows farmers and ranchers to deduct up to 100% of their income; and

– Increases the number of years over which a donor can take deductions from 6 to 16 years.

This package also extends the S Corporation donation incentive (http://www.landtrustalliance.org/policy/tax-matters/conservation-donation-rules) and the IRA Charitable Rollover (http://independentsector.org/ira_rollover) through 2011.

Although the estate tax incentives (http://www.landtrustalliance.org/policy/tax-matters/estate-tax-reform-and-land-conservation) for land conservation we championed did not make it in, this package does extend the 2001 law that removed the geographic limitations from the section 2031(c) estate tax exclusion for land protected by a conservation easement, through December 31, 2012. That means, even with a $5 million unified credit and 35% rate, landowners may still realize up to a $175,000 estate tax benefit for donating a conservation easement.

For complete details please see our Frequently Asked Questions (http://www.landtrustalliance.org/policy/tax-matters/incentive-faqs) and Conservation Donation Rules (http://www.landtrustalliance.org/policy/tax-matters/conservation-donation-rules) pages.

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Working to Make the Incentive Permanent Next Year

While this extension is good news, it’s also important to convey the message that land conservation projects can take many years to put together and the uncertainty that comes from renewing the enhanced incentive year to year prevents it from reaching its full potential. Working together with land trusts across the country, and our coalition of 65 agricultural, sporting and conservation organizations, we’ll be working hard to make the incentive permanent next year.

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Get a Head Start Today

You can help lay the ground work for next year by thanking your members of Congress for providing this extension today! Regardless of how your Senators and Representatives came down on H.R. 4853 (http://www.rules.house.gov/111/LegText/111_satohr4853_txt.pdf) , the important thing for us is to thank the 274 House and 41 Senate co-sponsors of H.R. 1831 and S. 812 (http://www.landtrustalliance.org/policy/tax-matters/cosponsors) — bills to make this incentive permanent. Their support helped ensure that our extension was included today and your thanks will remind them that we’ll need their help next year.

The updated Grassroots toolkit includes a sample thank you letter (http://www.landtrustalliance.org/policy/documents/11-Sample%20Thank%20You%20Letter%20to%20Your%20Representatives.doc) , but it’s even more important to thank them publicly! All press materials in the toolkit include sample language for thanking your delegation and you might also consider inviting your Rep. and the media to visit a conserved property in the spring (http://www.landtrustalliance.org/policy/advocacy-tips/meet) .

By helping modest income landowners deduct the full value of their contributions, this enhanced tax incentive has increased the pace of private, voluntary land conservation by about 250,000 acres a year nationwide, and is especially important now that the latest reports show that America is losing land to development at the rate of 1.5 million acres per year. Today’s renewal will create a permanent legacy of conserved land across America, and your work made it possible.