Federal Income Tax Incentives Conservation Easements Changing in 2014
Question: Are the federal income tax incentives for donating conservation easements going to change in 2014?
Answer: The “enhanced conservation easement incentive,” which applied to conservation easements donated in 2013, raised the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%. It also allowed qualified farmers and ranchers to deduct up to 100% of their AGI, and increased the number of years over which a donor can take deductions from 6 years to 16 years. Policy makers at the federal level had given conservation easement donors this tax benefit to encourage them to conserve land. Because Congress did not renew the enhanced conservation easement incentive prior to the end of the year, it expired on Dec. 31, 2013. Unless Congress acts, the tax deduction for a donation of a qualified conservation contribution will be the same rates as other charitable gifts. Attorney Sean Byrne of Bach & Jacobs has represented parties in multimillion dollar conservation land transactions and can advise you of your options regarding conservation easement donations.