Donating Land to Conservation Offers Significant Tax Benefits

We offer participants the opportunity to donate any amount from their experimental compensation to one or all of three nationally-recognized conservation organizations, the Sierra Club, the Nature Conservancy, and the United States National Park Service.1 Based upon our review of the literature, we expect that those in the experimental condition (valuation information) will donate fewer dollars on average than those in the control group. Although we do not explicitly alter any underlying incentive system to simulate crowding-out conditions, we expect that donation behavior will nonetheless diminish simply as a result of monetary priming.

Created 40 years ago, the provision allows property owners to take a charitable deduction for donat- ing qualified conservation easements—legal agreements that permanently limit the development or use of · a property—to a charitable organization. The deduction has proved to be a popular and successful tool for · encouraging the conservation of environmentally important land and historic buildings, and the tax benefit to

Conservation on private land costs the public hundreds of millions of dollars a year. Just from 2008 to 2012, for instance, landowners donating conservation easements claimed tax deductions that cost the U.S. Treasury $1.6 billion.

Federal Estate Tax Benefits - A donor may also save substantially on estate taxes if he donates a conservation easement. Under § 2031(c) of the Code, up to $500,000 may be excluded from one’s taxable estate if he or she had donated a qualifying ...

Under IRS regulations, the full fair market value of donated land or a conservation restriction is tax-deductible as a charitable contribution on your federal income taxes.

Referring back to our farmland example, if you purchased the farmland years ago for $500,000, but the land is now worth $1.5 million (because a ski resort could be built there), through a conservation easement you become eligible to take up to $1,000,000 in tax deductions because that is the value in the land you have now forfeited. You could then write off up to 50% of your adjusted gross income each year until the entire $1 million in deductions is exhausted or 15 years have gone by, whichever occurs sooner. Compared to the alternative of selling land and having to pay a capital gains tax, many people opt to donate land through conservation easements for the long-term financial upside.

When landowners donate a conservation easement, they give up part of the value of their property — often their family’s biggest asset. Tax incentives offset some of that loss in property value, making conservation a viable option for more landowners.

Conservation easement donations can significantly reduce estate taxes and support long-term land preservation. These incentives help families keep farms, forests and other private lands intact across generations.

If a conservation easement is voluntarily donated to a land trust or government agency, and if it benefits the public by permanently protecting important conservation resources, it can qualify as a charitable tax deduction on the donor’s federal income tax return.