Generous landowners who donate conservation easements to Bluegrass Conservancy are inspired by many things: love of the Bluegrass Region, connection to their land, and desire to leave a legacy for future generations. This inspiration is central to our work to permanently protect valuable agricultural, natural, historic, and scenic resources. In addition, donating a conservation easement can provide major financial benefits through federal income tax deductions and estate tax savings.
After a year-long lapse that left many important conservation donations in limbo, Congress recently renewed a 2006 incentive that enables farmers, ranchers, and other landowners to get a significant income tax benefit for donating a conservation easement on their land. The legislation allows donors to use their appraised conservation easement value to:
- Deduct up to 50% adjusted gross income (AGI) in any year (up from 30%);
- Deduct up to 100% AGI if the majority of that income came from farming, ranching, or forestry (up from 30%)
- Take deductions for as long as 16 years (up from 6 years).
This invaluable conservation tool has helped Bluegrass Conservancy work with willing landowners to protect more than 7,000 acres since the expanded income tax incentive was first enacted in 2006. Landowners who act quickly to conserve their land in 2011 can now enjoy these benefits, but unless Congress acts again, those benefits will be dramatically scaled back after December 31st, 2011.
Lapses in the enhanced incentive hamper our strategic conservation efforts and are frustrating for landowners. That’s why the land trust community is working so hard to enact legislation to make the enhanced incentive permanent. Executive Director Mackenzie Royce said, “It is important to conserve productive agricultural lands, natural habitats, historic landscapes, and scenic open space in the Bluegrass Region. The enhanced tax incentive is an essential conservation tool at a time when land conservation needs all the resources it can muster.”
As an example, under the prior law, a farmer earning $75,000 a year who donated a conservation easement worth $1 million could take a total of no more than $135,000 in tax deductions. Under the new law, that farmer can take the full $1 million in tax deductions – a significant increase.
Land conservation takes a team to be successful. We thank our members, conservation easement donors, and Congressional delegation for their invaluable contributions.
To learn more about the enhanced incentive visit call Bluegrass Conservancy at 859-255-4552 today.
