Benefits of Conservation Easements
In addition to maintaining the land’s natural and productive values, financial incentives have been established to encourage landowners to conserve their land. These incentives include various tax incentives, and can also include cash.
Federal Tax Deduction
A conservation easement may be treated as a charitable gift, making the value of the easement tax deductible. The federal tax incentive for conservation easements allows a landowner to deduct the easement’s value up to fifty (50) percent of his/her adjusted gross income, with a fifteen (15) year carry-forward period. Qualified farmers and ranchers are allowed to deduct the easement’s value up to one hundred (100) percent of their adjusted gross income with a fifteen (15) year carry-forward period.
Estate Tax Incentive
By prohibiting development rights, the value of the land is decreased. This lowers the value of the land for estate tax purposes, and can provide a significant reduction in the estate tax burden on family members.
The Wyoming Stock Growers Land Trust works to raise money from public and private funding sources to purchase a portion of a conservation easement with cash. This is known as a “bargain sale” conservation easement. Up to 75% of the value of the easement is purchased in a bargain sale transaction. The remaining 25% is treated as a donation and compensated through the various tax benefits described above. Funding for bargain sale transactions is limited.
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