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You can permanently protect your land while continuing to own it by donating a conservation easement to the Humane Society Wildlife Land Trust. Such an easement permanently limits future use of your land. An easement held by our Trust, will always prohibit recreational and commercial hunting and trapping on your property. Development also is either prohibited or limited to small areas of the property. You continue to own your property as you do now and use it as the easement provides. We would permanently monitor compliance with the easement and be empowered to take steps to ensure its enforcement. A sanctuary property protected by a conservation easement may still be sold by you or left to your family or to others in your will, but the easement remains permanently in force and will permanently restrict the property’s use -- regardless of who owns your property in the future.

On your federal tax return, the Internal Revenue Service (IRS) allows you to deduct as a charitable contribution the difference between the value of your property before the conservation easement that meets specific tax requirements and the value after the conservation easement goes into effect, provided you meet IRS requirements.

How You Benefit:

  • Permanent protection of your land
  • State and federal income tax savings
  • Possible state inheritance tax savings and, if the value of your estate is more than the current exclusion, federal estate tax savings
  • At any time after we have accepted an easement, you also could qualify for additional tax savings by transferring title of your property to us (e.g., through your will) for our permanent protection
  • Possible additional 40 percent exclusion benefit for your estate

Example:

Assumptions: You own several hundred acres of undeveloped land that is suitable for permanent preservation as a natural habitat for wildlife. The land has a fair market value of $600,000, and a conservation easement would reduce its value to $400,000.

To protect your property forever, you place a permanent conservation easement on the land with our Trust which meets the applicable tax regulatory requirements -- qualifying you for a $200,000 charitable donation income tax deduction (the difference in the appraised value of your land before and then after the placement of the easement). Should you be unable to use the full amount of this deduction for your tax return in the year of your gift, you have fifteen additional years to use the remaining value of your donation. In addition, the $200,000 value of the easement (i.e., the value of the development rights) is no longer part of your estate and is no longer subject to estate or inheritance taxes.

Your Conservation Easement Tax Savings:

If the appraised value of your land is now $600,000, after a conservation easement the appraised value will be $400,000. The difference between your land's pre-easement and post-easement value is $200,000. $200,000 is the amount that’s immediately deductible from your adjusted gross income on your income tax returns. The amount removed from your taxable estate $200,000.

Please note: The value of the deduction for this example is typically limited to 50 percent of your adjusted gross income. The unused portion of this deduction, if any, can be used for tax deduction purposes for a total of sixteen years.

Estate tax law also allows the exclusion of an additional 40 percent of the value of conservation easement-protected land (not buildings) from your taxable estate. To qualify, the conservation easement you donate to the Trust must (1) be for land that has been owned by you or a member of your family for at least three years before your death, and (2) be donated by you or by an immediate family member. Qualifying easements also may be donated by your executors after your death. The conservation easement itself must contain certain prohibitions.

This exclusion is, of course, subject to some monetary limitations ($300,000 in the year 2000) but, most importantly, this 40-percent exclusion is in addition to the estate tax benefit from the reduction in land value due to the conservation easement you originally donated to us. Therefore, in the example above, a qualifying conservation easement would allow your executors to exclude an additional $160,000 from your estate. You and your advisors should carefully review Section 2031(c) of the Internal Revenue Code to become more familiar with how this additional benefit may be helpful to you and your estate.

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You can help owls by preserving their habitats and using organic methods rather than chemicals to eliminate agricultural pests.

 

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