Conservation Easements and What They Mean to Buyers


On Tuesday of this week I attended a meeting of the Alabama Realtors Land Institute [RLI] and heard a presentation by Ronald Levitt and David Wooldridge of the Sirote & Permutt, PC law firm. The presentation was on conservation easements and the benefits these present to private land owners. We’ve auctioned several properties this year with conservation easements, including the Kluge Winery in Charlottesville, Va., purchased by Donald Trump, and it left me wanting to learn more about them. They discussed what may constitute a grant and what benefits this provided for a land owner. Here are a few points that I took away from RLI:

1)      More than 800,000 acres of land are put into conservation easements or outright purchases by land trusts each year that will benefit future generations.

2)      To have a qualified conservation contribution, a taxpayer must satisfy three requirements: (1) the real property must be a “qualified real property interest”; (2) the donee must be a “qualified organization”; (3) the contribution must be “exclusively for conservation purposes”.

3)      A conservation easement is a charitable donation that places a set of restrictions on a property for wildlife, recreation, green space, scenic vistas, historical areas or structures while a land owner can continue to use and enjoy it. A land trust is the beneficiary.

4)      The donor must be a qualified donor with a high income or the ability to generate significant high income in the future but can also be a high net worth individual.

5)      The property must be a capital asset and not held as a “dealer property” and meet other qualifications.

6)      The adjusted gross income limits are limited to 50% of a tax payer’s adjusted gross income for the year subject to change after 2011.

If you are interested in more information I will be happy to direct you to some professionals that can assist you, and, as always, be sure to consult with qualified legal and account professionals regarding your personal situation.

I’m curious to hear what your experiences with conservation easements have been in the past, whether it’s a property you’ve marketed as a broker or maybe even land you were personally involved with.

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~ by Craig King on November 3, 2011.

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