CONSERVATION
You've heard conservation easements provide one-of-a-kind tax benefits with significant financial gains.
You're interested in the large returns they bring,
but you've also heard conservation easements are highly technical and regulated.
Our team at Remterra is ready to answer all of your questions
and surprise you with how simple this investment strategy can be.
A client once told us we put the "ease" in conservation easements.
We'd be delighted to do the same for you and grow your financial legacy
through this unique investment opportunity.
WHAT IS A CONSERVATION EASEMENT?
Conservation Easements were established by Congress in 1980 under IRC 170(h) as a means to encourage land conservation by providing tax incentives for such conservation.
The tax incentives include the ability to deduct the appraised value of the land as a Charitable Deduction before the Conservation Easement donation less the value of the land after the Conservation Easement. Originally, the charitable deduction would be limited to 30% of an individuals Adjusted Gross Income and could be utilized as a carryforward for five (5) years, if not all used in the initial year.
Technically, a Conservation Easement is when a landowner, who has a property that meets at least one of statutorily defined preservation criteria, places a perpetual easement on a property to prevent the property from ever being developed.
Preservation Criteria includes:
1. The preservation of land areas for outdoor recreation by, or the education of, the general public
2. The protection of a relatively natural habitat of fish, wildlife or plants, or similar ecosystem
3. The preservation of open space including farmland and forestland where such preservation is:
A.) For the scenic enjoyment of the general public; or
B.) Pursuant to a clearly delineated federal, state or local government conservation policy, and will yield a significant public benefit;
C.) The preservation of a historically important land area or certified historic structure.
In 2006, Congress amended (temporarily) Section 170(h) to allow the charitable deduction of up to 50% of an individual’s Adjusted Gross Income, with a carryforward of fifteen (15) years, if not all used in the initial year.
In 2015, Congress made the Section 170(h) amendment permanent.
In 2022, Congress amended Section 170(h) to limit Conservation Easement deductions to 2.5 times the sum of each partner’s relevant basis, with the following exceptions:
170(h)(7)(C) – Contributions made after three year holding period for all individual non-related partners/members.
170(h)(7)(D) – Contributions by Family Partnerships
170(h)(7)(E) – Contributions to preserve Historic Structures.