There are many financial incentives for landowners to conserve their land with conservation easements. These incentives have been established through various legislation by government agencies at the state and federal levels, and by private organizations. CCLT member land trusts and public agencies can further explain tax benefits with interested landowners or parties.
Federal Tax Deduction
Conservation easements can be treated as charitable gift with the value of the easement tax deductible. A landowner can deduct the conservation easement value up to 50 percent of his adjusted gross income with a 15 year carry-forward period.
Estate Tax Credit
By granting away the development rights, the value of the land decreases and lowers the value of the land for estate tax. This can provide a signification reduction in the estate tax burdens on family members, furthermore, qualified conservation easements can earn an additional $500,000 estate tax exemption.
Colorado State Tax Credit
Colorado law allows for conservation easement tax credits. These can be used against Colorado state income taxes owed. They can be used over a 20 year period, transferred to other Colorado taxpayers, or refunded by the State to the donor (in years of surplus). Learn more about the Colorado conservation easement program at the Division of Real Estate here.
Property Tax Benefits
An agricultural conservation easement will receive the property tax valuation at its agricultural value.
Sometimes a land trust can raise money from public and private sources to purchase a portion of a conservation easement with cash, known as a bargain sale conservation easement. Usually, 50% of the value of the conservation easement is purchased in a bargain sale, and the remaining is treated as a donation.