WHAT TAX BENEFITS ARE AVAILABLE TO THE LANDOWNER?
A landowner who donates a conservation easement to the Bluegrass Conservancy may significantly reduce federal and state income taxes as well as estate and property taxes. If an easement qualifies under the Internal Revenue Service's rules as a charitable contribution, the value of the easement is deductible from federal and state income taxes. The value of the potential tax benefits depends on the appraised value of the easement and financial circumstances of the donor.
In order to qualify for favorable federal, state income and estate tax benefits, a conservation easement must be donated to a qualified conservation organization, such as the Bluegrass Conservancy. The easement must be perpetual in duration and must provide a public benefit. The Bluegrass Conservancy holds the easement and accepts the obligation to monitor and enforce the easement. The landowner retains the rights of ownership to the land, including the right to sell or transfer title to the property subject only to the terms of the easement agreement.
Careful estate planning and the donation of a conservation easement may allow heirs to retain the family farm upon a landowner's death. For estate tax purposes, the land is assessed at its value after the easement is in place, which may significantly reduce the estate taxes owed. Additional estate tax savings may also be available depending on landowner's individual circumstances and current tax law.