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Congress failed to renew special conservation easement tax break in 2011. The tax breaks expired Dec. 31 despite strong bipartisan support in both the House for H.R. 1964, the Conservation Easement Incentive Act, and in the Senate for its matching S. 339, the Rural Heritage Conservation Extension Act. Both Senate Finance Committee Chair Max Baucus (D-MT) and House Ways & Means Committee Chair Dave Camp (R-MI) support extending the tax break which made it possible for many farmers, ranchers and forest owners to deduct up to 100% of their adjusted gross income. With 292 House members and 11 Senators signed up in support of making the conservation tax break permanent, it is considered likely that a retroactive extension will be approved within the next month or two. The delay is being blamed on partisan wrangling which makes it difficult to pass even legislation which has overwhelming bipartisan support. Currently a 20-member congressional committee is at work on comprehensive tax legislation – which could include extending the conservation easement benefit. The extension delay does not affect the tax treatment for land already under a conservation easement. But it does mean that easements not yet finalized are likely to be put on hold until there is an extension. Compared to standard charitable deduction rules which continue to provide a 30% income deduction for up to six years, the enhanced conservation easement rules: boost the charitable deduction limit from 30% to 50% of the donor’s adjusted gross income; enable “qualified farmers and ranchers” to deduct up to 100% of their adjusted gross income; enable a closely held C-Corporation to deduct 100% of its adjusted gross income if the C-Corporation derives 50% or more of its income from farming and the C-Corporation is not publicly traded on a recognized exchange; enable shareholders in S-Corporations to deduct up to 100% of their adjusted gross income if they are a “qualified farmer or rancher.” The charitable deduction is not limited to the shareholder’s basis in the S-Corporation; and increase the carry-forward period for all donors to use the tax deductions from five to 15 years. The Land Trust Alliance points out that “some donors, particularly those with larger incomes, will find that the incentive's expiration makes little difference. But for most farmers and ranchers, this expiration and the accompanying uncertainty are extremely frustrating, potentially reducing the tax benefit of an easement donation by 88%.” For more information on the tax treatment of conservation easements, read the Land Trust Alliance’s updates. Current Status and Future Prospects for Conservation Easement Tax Cuts Unless Congress acts again, the enhanced conservation easement tax deduction will expire in December 31, 2011 - a repeat of the stress from 2010. Representatives Mike Thompson (D-CA) and Eric Cantor (R-VA) introduced legislation (H.R. 1831) to make the easement incentive permanent. That bill had of 274 cosponsors from all 50 states at the end of the 111th Congress, including majorities of both parties. Senators Max Baucus (D-MT) and Charles Grassley (R-IA) have introduced similar legislation in the Senate (S. 812), with 41 cosponsors. Both President Bush’s FY 2009 budget and President Obama’s FY 2010/2011 budgets support extending the incentive. The Joint Committee on Taxation has scored a permanent easement incentive as costing $761 million over ten years. It remains for someone to calculate the value of ecosystem services that would be preserved by that $761 million-worth of conserved land. More info » Extension of the Bush-era tax cuts approved In a 277-148 vote on December 16, 2010 the House of Representatives conceded without amendment to the Senate version of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. President Obama signed it into law on December 17, 2010. The measure extends the Bush era tax cuts through 2012 and provides an AMT patch through 2011; reinstates unified estate, gift and generation-skipping transfer tax with a 35 percent top rate and inflation-indexed $5 million individual exemption; and cuts the Social Security payroll tax by 2 percent for 2011. It also maintains the increase in valuation adjustment for donations for conservation easements (see 2008 Farm Bill Tax Provisions below), renews the charitable IRA rollover, and extends enhanced charitable deductions for contributions of food inventory, book inventories to public schools, corporate contributions of computer equipment for educational purposes, and a special rule for S corporations making charitable contributions of property. The American Jobs and Closing Tax Loopholes Act of 2010 bill was passed The American Jobs and Closing Tax Loopholes Act of 2010 bill was passed in the House of Representatives on May 28, 2010, and as of June 9, 2010 had been taken up by the Senate. The Act extends the special rule regarding contributions of capital gain real property for conservation purposes for one year for contributions made in taxable years beginning before January 1, 2011. Click here to read the section on Qualified conservation contributions. 2008 Farm Bill Tax Provisions The Farm Bill (H.R. 2419) which Congress enacted on May 22, 2008 includes a powerful tax incentive which has helped conserve over a half a million acres of natural areas, farms, and ranches across the US. The incentive had expired January 1st, but is now retroactive to the beginning of the year and will last through 2009. The incentive, which applies to a landowner's federal income tax, will: Raise the deduction a donor can take for donating a voluntary conservation agreement from 30% of their income in any year to 50%; Allow farmers and ranchers to deduct up to 100% of their income; and Increase the number of years over which a donor can take deductions from 5 to 15 succeeding years. Here is an example of how these tax deductions can help. Here is the IRS code (Internal Revenue Bulletin: 2007-25 ) for the extended tax provisions.

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Introductory Articles	Tax Benefits of Donating Conservation Land Tax Benefits of Donating Conservation Land. By:Robert Levin. There are several kinds of tax benefits available to donors of land or. conservation easements. This article attempts to summarize these benefits and provide some. examples of how they work. ... Estate Tax Update Estate Tax Update. Recent changes to the estate tax may have left some taxpayers unclear on their likely estate tax obligations. Both the annual life time exemption and the applicable tax rate have been the subject of recent changes.Under legislation passed in 2001, the U.S. estate tax exemption level has b ... Estate Planning Saves Money Estate Planning Saves Money. With the changes in estate tax laws promulgated by Congress in 2001, legislators have created the ultimate concept in estate planning. Under these rules, the estate of a taxpayer who dies in 2010 is completely exempt from tax (although a gift tax may be due, the estate tax i ... Easements: A Tool for Family and Business Planning Conservation Easements: A Tool for Family and Business Planning that Preserves Your Land. The unprecedented rise in real estate values in many parts of the country has produced new wealth but also new difficulties for landowners who want to pass cherished property to their heirs. This year, the federal estate tax ... Hypothetical Examples of the Tax Benefits of Donating Conservation Land Hypothetical Examples of the Tax Benefits of Donating Conservation Land. By: Robert Levin. The following numbers are purely hypothetical and are not to be relied on by anyone as a representation or guarantee of tax results. These numbers have been simplified and approximated and do not represent predictions for any ... Result Page: 1 2 3 4 5 6 7 8 9 10 11 12 13

Articles for Professionals	Farm & Ranch Estate Planning Rally 2002 Session 4K Farm & Ranch Estate Planning Jeremiah P. Cosgrove Ryland Howard. 2002 FARM CONSERVATION TAX UPDATE By Jerry Cosgrove, Attorney, American Farmland Trust Co-author, Your Land is Your Legacy: A Guide to Planning for the Future of Your Farm n September 1999, American Farmland Trust published a ... Federal Estate and Gift Tax Consequences of Donated Term Conservation Easements LAND TRUST ALLIANCE Exchange Summer 2000 25 Term conservation easements are conservation easements that are not perpetual, but, rather, restrict the property for a term of years. After the term has expired, the conservation easement restrictions terminate and no longer affect the land. Term conserva ... Estate Planning Opportunities Low Interest Rates Offer Estate Planning Opportunities By. James A. Houle, Esq.. Many of us have used the current low interest rates to save money by refinancing our homes and businesses. But attractive rates can also offer even better opportunities to save on gift and estate taxes, which now apply to tra ... Appraisals and Valuation Appraisals and Valuations - HOW THE GIFT IS VALUED. By: Stephen J. Small, Esq.. For purposes of the tax rules, the "value" of a property is equal to what it would sell for if it were put to the most valuable economic use that is possible under the circumstances. In many cases (though not all) with land t ... Estate Tax Incentive For Landowners AN IMPORTANT ESTATE TAX INCENTIVE FOR LANDOWNERS. By: Stephen J. Small, Esq.. In 1997, for the first time in more than a decade, Congress added to the law significant new tax incentives for voluntary land protection by private landowners.Let’s start with a few important observations. Every single conservation ea ... Result Page: 1 2 3 4 5 6 7 8 9

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