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Benefits
The
reasons for granting a conservation easement are many; however, there is
a unifying desire to see the lands natural and productive values
maintained. Many agricultural families have used easements as a
tool to provide a ranching opportunity for a new generation.
Communities have used conservation easements to help maintain the
viability of the regions agricultural economic base and to preserve its
rural character, which its residents hold dear.
When a conservation
easement meets federal requirements as a charitable gift, the donor may
be entitled to a reduction in both income and estate taxes. The
size of the reduction is related to the value of the conservation
easement, which is determined by a qualified appraiser. The
appraiser establishes the value of the property without a conservation
easement and again after the development restrictions have been put in
place. The difference between the two is the value of the
easement. This amount is available as an income tax deduction
according to the rules governing charitable contributions. The
value of conservation easements vary widely in the West depending on the
terms of the agreement and the development pressure in the area.
However, conservation easements used to preserve working ranches typically
range between 30% to 60% of the property’s fair market value.
Removing the
property’s development rights brings the land’s value closer
to its agricultural potential, which can substantially reduce inheritance
taxes that otherwise may force a family to sell all or a portion of the
ranch. Recent tax changes have allowed an additional inheritance
tax exclusion of up to $500,000 beyond the exclusion value of the
easement itself.
Tax
Brochure See new
legislation!
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You
may download the Tax Brochure PDF form, print it, fill it out and then
mail it in. This requires Adobe acrobat to be on your
computer. If you don't have this free software follow the link to find the
software and following Adobes instructions for installation.
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