February 28, 2011
A Conservation Easement is a restriction to protect natural resources associated at a subject site. The easement is a legally binding covenant that is publicly recorded and runs with title to the property for a specified time or in perpetuity. The easement represents a transfer of legal authority in regards to specific property uses. A Federal income tax deduction under section 170 of the Internal Revenue Code of 1986 is allowed if the transfer constitutes a “qualified conservation contribution”. There are four basic requirements of a qualified conservation contribution:
The property contributed must be a “qualified real property interest” – Generally, a property contribution meets the qualification if the contribution is a permanent restriction in perpetuity placed on the use which may be made of the real property.
The property must be donated to a “qualified organization” – a publicly supported charitable organization with a commitment to protect the conservation purpose of the donation.
The gift must be for “conservation purposes” including the preservation of land areas for outdoor recreation by, or education of, the general public; protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem; preservation of open space, including farmland and forest land; and preservation of a historically important land area or a certified historic structure.
The contribution must be “exclusively for conservation purposes.”
Our firm works in consultation with the Midwest Mitigation Oversight Association, a local 501c3 non-profit corporation to assist clients in evaluation of easement conveyances. Contact your local Terra Technologies office for more information.
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