BENEFITS OF AN EASEMENT
What are the non-monetary rewards of placing a conservation easement on your land?
A conservation easement allows you to influence the fate of your land in a changing world. The land you love can be protected for the benefit of generations to come.
Are there economic benefits for a grantor who places a conservation easement on his/her land?
An income tax deduction is available for the value of the easement. If you place a conservation easement on your land, you do not give up ownership or management of the land but you have forever given up the right to do take certain actions that current laws and regulations allow. Therefore, in the eyes of the IRS, you have made a donation of property to benefit future generations, and that donation qualifies for a tax deduction. The amount of your donation is the value of the rights you have given up.
How is the donation of a conservation easement valued?
A donation of a conservation easement is similar, though not identical, to a gift of artwork to a museum. One difference is that the artwork donor gives up all rights to a piece of art, whereas the conservation easement donor continues to own the land. Despite this difference, the IRS views both of these donations as gifts of non-cash property that can be appraised to ascertain their donated value. Artwork must be appraised by a third party to support a tax deduction. Similarly, the conservation easement must be appraised by a qualified appraiser to support the donor’s claim for a tax deduction.
“In perpetuity” is a long time. How can a conservation easement be legally enforced in perpetuity?
This is specified in California law. No matter how many times the property changes hands, the terms of the easement are enforceable against all later owners. California Civil Code Sections 815-816 confirms this. It is AVLT’s (or other grantee’s) responsibility to monitor the conservation easement over time.