Land conservation tax break is set to expire Dec. 31

NOVELTY, Ohio — The enhanced federal income tax break for those who grant qualified conservation easements is set to expire at the end of 2009, and land preservation experts are urging property owners to act quickly in order to take advantage of this benefit before the window closes.

Rich Cochran, president and CEO of the nonprofit Western Reserve Land Conservancy, said landowners have until Dec. 31 to preserve their property under the existing law.

Great opportunity

“This is a great opportunity for farmers and other property owners who want to conserve their family land,” Cochran said, adding that interested owners should consult their own legal and financial advisors to determine how this law might affect individual situations.

The Land Conservancy, which has preserved more than 250 properties and more than 15,300 acres in northern Ohio, has land-protection experts on staff to answer questions about conservation easements. You can contact the staff at 440-729-9621 or info@wrlc.cc.

The Land Conservancy is based in Chesterland and has field offices in Medina, Oberlin, Trumbull County and Akron.

In 2008, Congress extended legislation that significantly improved the federal income tax benefits for landowners who granted qualified conservation easements to preserve land.

Under this law, which is set to expire Dec. 31, not only are tax deductions larger, but the remaining balance of the easement value after the year the conservation easement is granted may also be carried forward over a much longer period of time than previously allowed.

Additional benefits

Additional benefits have been made available to qualified farmers and ranchers. Deductions are capped depending on grantors’ adjusted gross income, which determines a taxpayers’ income tax liability.

Previously, donated conservation easements entitled the landowner to a deduction of up to 30 percent of his or her AGI the year the easement took effect. This new legislation entitles grantors to deductions up to 50 percent of their AGI. This increase allows grantors to realize the value of preserved property more quickly.

Qualified farmers enjoy even greater deductions. Those who earn more than half their gross income through farming may deduct up to 100 percent of their AGI.

Another major benefit included in the expiring legislation dramatically increases the amount of time over which landowners can extend tax benefits after the initial charitable deduction.

Under the old law, donors who preserved land and claimed a charitable deduction could carry over the unused balance for up to six years. The new legislation extended that period a full decade, allowing landowners up to a maximum of 16 years to carry forward the unused balance.

In short, easement grantors may deduct up to 50 percent (100 percent for qualified farmers) of their AGI every year for up to 16 years or until the available deduction is used up.

Conservancy

Western Reserve Land Conservancy is a nonprofit conservation organization that works to preserve the scenic beauty, rural character and natural resources of northern Ohio. The Land Conservancy serves 14 counties stretching from the Lake Erie Islands to the Pennsylvania border.