Landowners that donate conservation easements may be eligible for
Federal and State tax benefits. Both the Federal government and New
York State have policies that encourage landowners to donate
conservation easements to protect their land. In return for
conserving land that provides a public benefit, the landowner may
qualify for a Federal and State income tax deduction and/or the New
York State Conservation Easement Tax Credit. Landowners who have
donated conservation easements on their land may also benefit from
reduced estate taxes.
The donation of a “qualified” conservation easement to a “qualified”
organization or agency is considered a charitable gift by the IRS
and may be taken as a federal and state income tax deduction. The
amount of the gift is determined by a qualified appraiser.
From 2006 on,
property owners with a qualified (donated or partially donated)
permanent conservation easement on their land can get an annual,
refundable State income tax credit equal to 25% of the combined
town, county, and school taxes paid on their land (exclusive of
buildings and structures) during the previous tax year. This credit
is capped at $5,000 per year, and is transferable to the next
landowner.
Conservation
easements can be utilized to reduce the fair market value of a
property by restricting the amount and type of development that may
occur. This reduction in the fair market value of the property also
reduces the value of the estate for estate tax purposes.
These incentives may
lower or eliminate the estate taxes on a property and allow land to
remain in the family rather than being sold to pay estate taxes.
These are especially relevant incentives for farmers and landowners
that are “land rich” and “cash poor.”
If you are
interested in learning more about Tax Incentives, please contact us
at
(845) 677-3002.
This information does not constitute legal or tax advice and DLC
strongly recommends that you discuss your land conservation options
with legal and tax professionals.
