|P.O. Box 884 * Chippewa Falls, WI 54729|
Qualifying for a Federal Income Tax Deduction
If you donate a conservation easement that meets federal tax code requirements, the value of the easement can be treated as a charitable gift and deducted from income tax (to the extent your particular tax situation allows). For income tax purposes, the value of the easement is the difference between the land's value with the easement and its value without the easement. If a property is worth $500,000 unrestricted, for example, and an easement that precludes further development is placed on it that drops it's value to $200,000, the value of the donation is $300,000. Easement values vary greatly, in general, the highest easement values result from very restrictive conservation easements on tracts of developable open space under intense development pressure.
In order to qualify as a charitable donation, an easement must meet federal tax code requirements - in essence, must provide public benefit by permanently protecting important conservation resources. however, an easement does not have to cover all of the property, preclude all user or development, or allow public assess to qualify.
Because a conservation easement lowers the property's fair market value, it can also result in lower property taxes.