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Big Tax Break for Farm and Ranch Land Conservation

On July 17, the U.S. House of Representatives passed a bill that would make the Enhanced Conservation Easement Incentive permanent. This is big news for farmers, ranchers and for those interested in preserving open space. The bill is now awaiting a vote in the Senate.

With this tax law, farmers and ranchers could donate a conservation easement to a qualified organization and deduct up to 100 percent of their adjusted gross income each year, up to the value of the donation.  Remarkably, any unused deduction could be carried forward for up to 15 years.  Non-farmers would be able to deduct up to 50 percent of their adjusted gross income annually for a similar donation and for the same carry-forward period.

A conservation easement is a donation of specific development rights on private property.  The donation must be given to a qualified organization that “holds” those rights.  The qualified organization must be a nonprofit organization or a government agency.

The bill would amend Code Section 170(b)(1)(E).  This “incentive” was first enacted in 2006 but has never been made permanent.  Under current law, it expired on December 31, 2013.

  • Read more on this and other charitable giving tax incentives in the bill:  Ashlea Ebeling, 4 Charitable Giving Tax Breaks in Play, (July 18, 2014).  Available here.
  • Read the text of the bill here.