Will Conservation Easement Tax Breaks Be Extended?

By Joseph Guinto

Speak now or forever lose your easement. A tax break for conservation-related land donations-known as conservation easements-is about to expire. That is unless Congress does something about it.
The tax break, signed into law by President Bush in August 2006, vastly expanded the deductions landowners could get in exchange for donating their lands to trusts and surrendering the right to develop those lands. But unless the tax break is extended, it will only apply to lands donated in 2006 or 2007
Some landowner lobby groups are pushing hard for an extension, as are members of Congress, who note that the temporary tax deductions passed in 2006 added to the increasing popularity of conservation easements. The Land Trust Alliance, a Washington, D.C.-based interest group, reports that even before the new tax breaks went into effect, the total acreage of conservation easements under control of land trusts had skyrocketed. Acreage under easement increased 148 percent from 2000 to 2005, reaching 6.2 million acres at last count.
For landowners of moderate income, whom the 2006 bill was intended to help, a lot is at stake if the tax break is not extended. The government offers this example: Under the current law, if a rancher earning $50,000 a year on a ranch appraised at $2 million donated half his property to a conservation easement, he would be able to receive $800,000 in tax deductions over a maximum of 16 years. Once the law expires, the maximum tax break on the same donation would fall to $90,000 over a maximum of six years.
Numbers like that have inspired influential Democrats and Republicans in Congress to sponsor bills that would permanently extend the 2006 tax break.