Income Tax Benefits:
If you make a gift of land or a conservation easement to a public agency or a land trust, you may be able to deduct the fair market value of that donation from your federal income taxes. This tax deduction can be made for the portion of a bargain sale that is given, not sold, as well.

Outright gifts of money or other assets are the simplest way to support a land trust and gain a tax deduction. Donations of other assets, like securities, stocks, life insurance, or valuables, such as artwork, also may be given. Such donations are deductible up to the value of the donated item. Taxpayers cannot eliminate all taxable income by making charitable donations. Individuals can deduct up to 50% of their adjusted gross income for cash donations.

Estate Tax Benefits:
Many heirs to large tracts of open space, farms, natural areas or timberland face substantial estate taxes. Estate tax is levied on a property's "highest and best use" — usually the amount a developer or speculator would pay. The resulting tax burden can be so large that the heirs must sell the property to pay the taxes.

A conservation agreement can reduce estate taxes because the restrictions in the agreement may reduce the market value of the property. A conservation easement can be donated in a will, and then the appraised value of the gift may deducted from the taxable estate. These easements (agreements) can also be donated or strengthened post-mortem by the estate's executor.

In certain circumstances, federal tax law also allows for a 40% reduction in the remaining value of the land covered by an easement when that easement was donated to a qualified organization. This reduced value is the basis for an estate tax. Other exclusions from estate taxes may also apply. You should consult your tax advisor about these potential advantages.

For more information on land conservation tax considerations in Wisconsin, please visit Gathering Waters Conservancy.

 

Property Tax Benefits:
Local real property tax assessments are based on a property's full-market value, which may take into consideration the property's development potential. If a conservation agreement (easement) reduces or removes this potential, the level of assessment and, accordingly, the amount of real property taxes may be reduced. Wisconsin Statute 70.32(1g) requires local tax assessors to consider the effects of a conservation easement when assessing property. In practice, there has been wide variation in how easements are considered by assessors across the state.