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LandThink.com
The pathway to conservation easements
is not always a straight linebut,
more often than not,
is worth the trip.
[Dean Saunders, ALC]
Most landowners are interested in tax advantages when considering a conservation easement. Landowners may receive income tax advantages that include gifting, tax deferred exchanges, and gains used against the basis value. Tax advantages can also assist in the transfer of property from generation to generation and can lower estate taxes for heirs by maintaining the agricultural classification of the land.
A Generational Transfer may benefit a landowner by lowering the value of the property for estate tax purposes. This happens because after the rights to develop it are sold, the highest and best use of the land is usually agricultural.
Gifting is a using the conservation easement as a donation to the government or to a qualified conservation organization. Gifting is treated as a charitable contribution and results in lower Federal income tax.
A Tax-deferred Exchange is an option allowed by the IRS for landowners who owe capital gains taxes because of the sale of property. This defers paying the tax by purchasing another piece of property instead of paying the tax. Known by several terms, a tax-deferred exchange is often referred to as a Like-kind Exchange or a 1031 Exchange.
The IRS allows a tax exchange for owners who have a capital gain because of the sale of a conservation easement. In my award-winning booklet, “We Create Solutions for Landowners: A Primer on Conservation Easements,” see case study #1 for an example of how this might work for you.
Gains Used Against Basis includes basis as the amount you paid for the property, plus the value of any capital improvements, less any depreciation claimed. If you sell a conservation easement, the IRS will allow you to reduce your basis by the amount of the conservation easement, which may result in you not paying any capital gains taxes. In my award-winning booklet, “We Create Solutions for Landowners: A Primer on Conservation Easements,” see case study #2 that uses this tax advantage.
To take advantage of a Federal income tax deduction, a conservation easement must be perpetual and given to a specific division of the government or a qualified conservation organization. Annually, the division or organization monitors the property to assure that the easement is not being violated.
For more information on conservation easements, land, commercial, and industrial properties; and land and resource management, please visit www.saundersrealestate.com or call Dean Saunders at 1-877-518-LAND.
~Dean Saunders, ALC (Accredited Land Consultant), is considered in the industry as an expert on process of conservation easements and understands the needs and processes of the government agencies involved. The company, Coldwell Banker Commercial Saunders Real Estate, is located in Lakeland, FL and offers real estate services for land, commercial, industrial and conservation properties, as well as land and resource management.
A Generational Transfer may benefit a landowner by lowering the value of the property for estate tax purposes. This happens because after the rights to develop it are sold, the highest and best use of the land is usually agricultural.
Gifting is a using the conservation easement as a donation to the government or to a qualified conservation organization. Gifting is treated as a charitable contribution and results in lower Federal income tax.
A Tax-deferred Exchange is an option allowed by the IRS for landowners who owe capital gains taxes because of the sale of property. This defers paying the tax by purchasing another piece of property instead of paying the tax. Known by several terms, a tax-deferred exchange is often referred to as a Like-kind Exchange or a 1031 Exchange.
The IRS allows a tax exchange for owners who have a capital gain because of the sale of a conservation easement. In my award-winning booklet, “We Create Solutions for Landowners: A Primer on Conservation Easements,” see case study #1 for an example of how this might work for you.
Gains Used Against Basis includes basis as the amount you paid for the property, plus the value of any capital improvements, less any depreciation claimed. If you sell a conservation easement, the IRS will allow you to reduce your basis by the amount of the conservation easement, which may result in you not paying any capital gains taxes. In my award-winning booklet, “We Create Solutions for Landowners: A Primer on Conservation Easements,” see case study #2 that uses this tax advantage.
To take advantage of a Federal income tax deduction, a conservation easement must be perpetual and given to a specific division of the government or a qualified conservation organization. Annually, the division or organization monitors the property to assure that the easement is not being violated.
For more information on conservation easements, land, commercial, and industrial properties; and land and resource management, please visit www.saundersrealestate.com or call Dean Saunders at 1-877-518-LAND.
~Dean Saunders, ALC (Accredited Land Consultant), is considered in the industry as an expert on process of conservation easements and understands the needs and processes of the government agencies involved. The company, Coldwell Banker Commercial Saunders Real Estate, is located in Lakeland, FL and offers real estate services for land, commercial, industrial and conservation properties, as well as land and resource management.
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