Tax Implications

Land Conservation Provides Public Benefit

Our air and water are limited resources. The forest canopy and vegetation serve as critical filters for our air. Wetlands that border our rivers, lakes and streams recharge our freshwater aquifers and filter pollution before it reaches our marine environment. Conservation lands contribute to our island economy by enhancing tourist-based industry and property values while minimizing stresses on community services and infrastructure (public utilities, roads, schools, EMT’s, etc.). Most importantly, private land conservation groups like the San Juan Preservation Trust draw upon the power of the private sector to protect community resources, including clean water, food security, wildlife habit, and places for our recreation and reflection.

Recognizing these many public benefits, Congress has created significant federal tax benefits to encourage private conservation. This remains one of the few issues that politicians working within our divided political climate seem to universally agree upon.

The public receives a benefit when you donate land or a conservation easement to the San Juan Preservation Trust, and a private landowner gives away significant value when she or he donates a conservation land or easement. The Internal Revenue Service’s tax code acknowledges (and encourages) these many gifts to the public good by providing tax benefits for private land conservation.

Conservation Tax Benefits: How They Work

In exchange for donating land or a conservation easement to the San Juan Preservation Trust, qualified landowners may receive a tax benefit in the form of a deduction.  For gifts of land, the value of the donation for income tax purposes is generally equal to the market  value of the land on the date that the gift was recorded. For gifts of conservation easements, the value of the donation for income tax purposes is generally equal to the difference between the land’s unrestricted fair market value on the date of the gift  (without a conservation easement on it) and its new value with limited development or usage rights.

Under the current IRS guidelines, you could be eligible to deduct the value of a donated property or conservation easement up to 30 percent of your adjusted gross income (AGI) per year. For example, if your AGI is $100,000, you would be eligible to deduct as much as a $30,000/year from your tax return for up to 6 years. In this example, if your AGI remains constant at $100,000 and the value of your conservation gift is $150,000 at the time it was donated, then you could deduct up $30,000 per year for 5 years in a row ($30,000 x 5 years = $150,000). Please keep in mind that this example is for illustrative purposes only. You should always consult your tax advisor before determining how conservation tax benefits might work for you. 

For more information, please contact the San Juan Preservation Trust at 360-378-2461.

All inquiries to the San Juan Preservation Trust are confidential and without obligation.