Adjusted Deduction Helps Protect Important Resources

In 2006, Congress changed the tax incentive for voluntary conservation donations – donations by private landowners that retire development rights to protect significant wildlife, scenic, and historic resources.

That change enables family farmers, ranchers, and other moderate-income landowners to get a significant tax benefit for such donations, which simply wasn’t possible under prior law. 

That opens the door to voluntary, landowner-led conservation on millions of acres of land across the country.  Most such donations are made to local, community-based charities dedicated to keeping land in agriculture, conserving important wildlife habitats, and protecting important open space and historic resources.  

But the 2006 law will expire at the end of 2007!       

How It Works

The 2006 law:

• Raised the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%;
• Allowed qualified farmers and ranchers to deduct up to 100% of their AGI; and
• Increased the number of years over which a donor can take deductions from 6 years to 16 years.

Under prior law, an agricultural landowner earning $50,000 a year who donated a conservation easement worth $1 million could take a total of no more than $90,000 in tax deductions!  Under the new law, that landowner can take as much as $800,000 in tax deductions – still less than the full value of their donation, but a significant increase.

Conservation Incentive Combined with Solid Tax Reforms

The 2006 law also set higher standards for appraisers and appraisals of all donated property, and set higher penalties for abusive appraisals.  Conservationists support this to ensure the integrity of the charitable donation process.  The law also tightened restrictions on donations of easements to protect historic buildings.  These reforms do not expire at the end of this year.

Widespread Support

Passage of the 2006 law was supported by a wide variety of organizations, including:

 

American Bird Conservancy American Farmland Trust American Fisheries Society American Sportfishing Association Archery Trade Association ArrowSport BASS/ESPN Outdoors Bear Trust International Berkley Conservation Institute Bowhunting Preservation Alliance Campfire Club of America Civil War Preservation Trust Dallas Safari Club Ducks Unlimited Houston Safari Club Association of Fish and Wildlife Agencies Izaak Walton League of America Land Trust Alliance National Audubon Society

National Shooting Sports Foundation North American Grouse Partnership Pheasants Forever Piedmont Environmental Council Quail Unlimited Quality Deer Management Association Rocky Mountain Elk Foundation Safari Club International Scenic America Texas Wildlife Association The Conservation Fund The Nature Conservancy The Wildlife Society Theodore Roosevelt Conservation Partnership Trout Unlimited Trust for Public Land Whitetails Unlimited Wildlife Management Institute

How You Can Help

Please ask your Senators to cosponsor S. 469, legislation introduced by Senators Max Baucus (D-MT) and Charles Grassley (R-IA).  This legislation would make the 2006 incentive a permanent part of tax law.

Similar legislation will be introduced soon in the House of Representatives.  Please ask your Representative to support making the new incentive for conservation by private landowners a permanent part of the tax law.

This momentum to make the new incentive permanent is also supported by President Bush.  The President’s budget for fiscal year 2008 released in February included a provision that also supports making the new incentive permanent.

For more information, please contact:
           
Russell Shay
Land Trust Alliance
rshay@lta.org
202-638-4725