Estimate potential federal tax deduction for a conservation easement.
A conservation easement is a voluntary legal agreement that permanently limits uses of the land to protect its conservation values. Landowners who donate a qualifying easement may be eligible for a significant federal income tax deduction.
The fair market value of the property as determined by a qualified appraisal.
The percentage of the property's value that the easement restricts (typically 20%–60%).
A rancher in Montana owns 500 acres appraised at $2,000,000. A qualified appraisal determines that placing a conservation easement would reduce the property's value by 40% (restricting subdivision and commercial development).
The rancher can deduct up to 50% of AGI per year, carrying forward unused deductions for up to 15 years. They keep the land, continue ranching, and receive a substantial tax benefit.
Qualified conservation easement donations can provide a federal income tax deduction of up to 50% of AGI, with a 15-year carry-forward period.
Easements must serve a recognized conservation purpose: habitat preservation, open space, historic preservation, or public recreation/education.
Conservation easements are typically permanent and recorded on the deed. The land remains privately owned but development rights are restricted.
A conservation easement is a voluntary legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land to protect its conservation values, such as wildlife habitat, scenic views, or agricultural use.
The deduction equals the difference between the property's fair market value before and after the easement. This is typically the appraised value multiplied by the easement percentage (the portion of development rights donated).
Landowners who donate a qualifying easement to a qualified organization (501(c)(3) land trust or government entity) for conservation purposes may deduct the value of the easement from their federal income taxes.
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