Guest column: Tax incentives for conservation on private land
Last year, Congress passed a new tax law that helps all of us interested in protecting clean water, natural areas and family farms. This new law significantlyenhances the federal tax benefits for landowners who donate conservation easements.
Under this type of easement, landowners voluntarily agree to permanently limit dense residential or commercial development on their land in order to protect and preserve the land as is for future generations. The landowners continue to own, manage and otherwise use their land, and the public gets protection of resources that are an important heritage for our community.
What Congress did makes the tax law work much better for family farmers and other moderate-income landowners who, under the old rules, only got credit for a small portion of the value of their donation.
T h e n ew l aw a l l ows conservation donors to deduct up to 50 percent of their adjusted gross income in the year of the donation (up from 30%), and, if most of their income is from farming, ranching or forestry, they can deduct up to 100% of their adjusted gross income. Even more important is that if the value of their donation is larger than this, they can continue to use the deduction for up to 15 years (up from five) after the initial year.
Consider this example: A landowner who earns $50,000 a year has preserved 100 acres through a donated easement to the Licking Land Trust valued at $500,000. Under the old law the charitable deduction was $15,000 in the year of the donation and $15,000 for an additional 5 years a total of $90,000 in tax deductions. Good land conservation, but a bad tax deal. But under the new law the landowner's deduction is $25,000 in the year of the donation plus $25,000 for an additional 15 years a total of $400,000 in tax deductions. Good land conservation and a fair tax deal. Furthermore, if the landowner qualifies as a farmer or rancher, she could take a maximum of $500,000 in tax deductions for her $500,000 gift.
The Licking Land Trust has been accepting donations of conservation easements for 17 years, and, working with generous and forward-thinking landowners, has protected over 730 acres in and around Licking County. This change in the law will enable us to help many more landowners protect resources for our children, their children and for our community's future.
At the current time, this significant tax incentive only applies to gifts of conservation easements that are completed before December 31, 2007. A bill has been introduced in Congress to make these new tax incentives permanent, but for now the incentives are good only for transactions completed this year. The people of Central Ohio believe in protecting our land and wildlife habitat, part of the tradition that makes this a great place to live. Thanks to a helping hand from Congress, we will be able to do even more of this in 2007.
The author or other members of the Licking Land Trust will respond to questions about conservation easements, the tax incentives, and the Licking Land Trust. Please visit us at or call 740-587-4104.