Does conveying a conservation easement to a charitable organization create any tax advantages for the landowner?
Depending on the owner’s exact tax status, there may be a number of tax advantages to the owner from conveying a conservation easement on property. Advalorem taxes may decrease to the degree that a conservation easement restricts the property’s development potential and therefore its fair market value. The value of the owner’s estate may also decrease, thus reducing inheritance taxes. An owner who donates an easement may enjoy these benefits and may also use the value of the charitable donation to reduce income tax obligations for a period of years. The tax advantages of a particular transaction will depend, among other things, on the landowner’s tax status and on the percentage of fair market value that is attributable to the interests conveyed away by easement. Each owner should consult his or her tax advisor concerning a proposed sale or donation of an easement.
