There is a real chance that by the end of this calendar year, December, 2007, Congress will finally recognize the stewardship contributions of private landowners and will provide real financial rewards ($$) and incentives for conservation on private land.  

 

Under the leadership of Senate Finance Committee Chair Max Baucus (D-MT), and Senator Charles Grassley (R-IA), last week the Senate Finance committee marked up (meaning: approved in committee votes) new legislation to “Make Permanent the Special Rule Encouraging Contribution of Capital Gain Real Property for Conservation Purposes.” What does this mean? It means conservation easements will continue to qualify for significant federal IRS tax deductions.

 

The Pension Protection Act of 2006 (re: the “Special Rule Encouraging. . .) made a number of steps up from previous incentives for conservation. These increased incentives make conservation an economically viable solution for America’s landowners.

 

Here is some of the language directly from the legislation:

This is up from 30%. Also,

This is up from 5 years. 

 

For a farmer or rancher (50% or more of their gross income comes from the trade or business of farming) the incentives are even greater allowing for 100% of a conservation contribution to be deductible as long as the property remains available for agricultural production. On top of the deduction, it also means the land can remain working and providing income for farmers, ranchers, and the communities that depend on them.

 

Depending on individual circumstances, these provisions mean real money and real tax deductions for landowner’s pockets. See our Conservation Tax Center and PLN for the full language specifics of these important provisions. Unless this legislation passes, these provisions are set to expire after 31 December 2007. 

 

The Finance Committee also approved new legislation sponsored by Senator Crapo (R-ID) to “Provide Tax Credit for Recovery and Restoration of Endangered Species.” The proposed legislation provides

“a credit against income taxes for (1) costs paid or incurred by an eligible taxpayer for conservation of qualified species pursuant to a habitat management plan, (2) a percentage of the loss in value to real property attributable to an easement placed on property pursuant to habitat protection agreements.” 

The allowable credit amount is 100% of costs paid or incurred for perpetual habitat protection agreements. In plain English, landowners that want to improve endangered species habitat on their land will now be compensated for their efforts in the form of tax credits. Landowners will need a qualified appraisal for their tax return (see PLN for Appraisers).

 

These initiatives are huge, and long overdue, and in the long run should be a great boon for farmers and ranchers across the country from Maine to California. 

 

Be sure to contact a good lawyer familiar with these important conservation tax provisions, and a qualified appraiser.