How is a preservation easement valued?
The preservation easement donor engages a qualified real estate appraiser to perform the appraisal which must be prepared no earlier than 60 days prior to the preservation easement donation date but no later than the due date (including extensions) of the income tax return in which the charitable deduction is first claimed. The value of the preservation easement donation is usually determined by applying the “before and after” valuation approach. Performed by a qualified real estate appraiser, the amount of the charitable deduction is computed by determining the difference between the fair market value of the property before the granting of the preservation easement and the fair market value of the property after the granting of the preservation easement.
