Ag easement donations offer tax advantages

SALEM, Ohio — Under Senate Bill 223, signed into law in 1999, Ohio landowners can donate an agricultural easement on their farm to the Ohio Department of Agriculture (ODA), or to any county, municipality, township or charitable organization such as a land trust.



The easement is either voluntarily sold or donated by the landowner, and is a binding agreement that prohibits non-farm development from taking place on the land.



At this time, there is no funding available from the State of Ohio for purchasing easements and the ODA’s Office of Farmland Preservation can only accept donated easements.



If an easement is granted in perpetuity as a charitable gift, income tax and federal estate tax advantages usually accrue.



Individual donors can deduct up to 30 percent of their adjusted gross income from their taxes in the year of the gift. Easement donations in excess of the annual limit can be applied toward federal income taxes for the next five years.



Under the Taxpayer Relief Act of 1997, there is an additional incentive for landowners to donated permanent agricultural easements if the farmland is located within 25 miles of a metropolitan area, according to Joe Daubenmire, assistant manager of the ODA’s Office of Farmland Preservation.



Estate executors can elect to exclude 40 percent of the value of land (up to $300,000), subject to a qualified agricultural easement from the taxable estate. This federal estate tax benefit, Daubenmire said, will increase to a maximum of $500,000 by 2002.



Additional information is available from the Office of Farmland Preservation, 614-466-2732.