Internal Revenue Fact Sheets & Guidance as it Pertains to Conservation Easements

What follows below are Internal Revenue Service documents pertinent to the conservation easement process.

Summary of Internal Revenue Code, Section 170(h)
This document provides a summary of Internal Revenue Code, Section 170(h) which establishes tax incentives for conservation easements. It is a general overview of the pertinent sections of the code and includes definitions for, “qualified conservation contribution,” “qualified real property interest,” “qualified organization” and “conservation purpose.”

Interpretation of “Conservation Purpose”
This document provides detailed Internal Revenue Service guidance as to what, “conservation purpose,” means relative to the conservation easement process. The land that you are easing must serve a, “conservation purpose.” Otherwise, he property is no eligible for a tax incentive.

Interpretation of “Exclusively for Conservation Purposes”
This document provides Internal Revenue Service guidance as to what, “exclusively for conservation purposes,” means relative to the conservation easement process. This details the fact that a conservation easement is in perpetuity and may not be changed or abolished once filed.

Interpretation of “Valuation” 
This document provides Internal Revenue Service guidance as to what, “valuation,” means relative to the conservation easement process. This document details how the value of a conservation easement shall be determined along with associated examples.

Interpretation of “Qualified Appraiser” and “Qualified Appraisal”
This document provides Internal Revenue Service guidance as to what, “qualified appraiser,” and, “qualified appraisal” means relative to the conservation easement process. This document was provided to the Land Trust Alliance in 2006 at their request.Any tax deduction taken due to the placement of a conservation easement, must contain a, “qualified appraisal” performed by someone who is a, “qualified appraiser.”

Guidance Regarding Natural Habitat Preservation
This document was provided to the Land Trust Alliance in 2006 at their request. The document provides guidance from the Internal Revenue Service as to what types of habitat preservation will qualify a conservation easement as a, “qualified conservation contribution,” which is eligible for tax incentives.

IRS Form 8283
IRS Form 8283 is the form which must be handed in with your taxes to receive your income tax deduction. This form certifies the conservation easement value and the, “qualified appraiser,” donor and donee must all sign this document attesting to the donation amount.

IRS Form 8283 Instructions
These instructions were modified in 2006 and the donor now must attach a statement which:
1.) Identifies the conservation purposes furthered by your donation,
2.) Shows, if before and after valuation is used, the far market value of the underlying property before and after the gift;
3.) States whether you made the donation in order to get a permit or other approval from a local or other governing authority and whether the donation was required by a contract due to the fact that this could void your eligibility
4.) Discloses if you or a related person has any interest in other property nearby. If you do, you must disclose said interest and your appraiser should have examined any potential impact to he value of these properties.

To learn more about the conservation easement process, contact Arthur H. Howland & Associates, P.C. at (860) 354-9346 and ask for Paul Szymanski. We specialize in assisting donors step-by-step with the conservation easement process offering a full array of civil engineeringland surveyingland planningsoil science and consulting services. You can also visit us on the web at http://ahhowland.com.

One should always consult their attorney or accountant for legal or tax advice.
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