CONSERVATION CORNER
September 4, 2006
Lott, Congress Pass New Tax Benefits For Easements
by James L. Cummins

Recently, Congress passed and President Bush signed into law a tremendous expansion of the federal conservation tax incentives for the donation of conservation easements.

A conservation easement is a restriction a landowner voluntarily places on specified uses of his or her property to protect natural, productive or cultural features as the landowner desires. The easement is recorded as a written legal agreement between the landowner and the "holder" of the easement, which is usually a land trust. It may also qualify the landowner for significant tax benefits.

Conservation easements can assist landowners in protecting their land, wildlife habitat, scenic areas or historic buildings. Every conservation easement document is individually crafted and reflects the special qualities of the land protected and the needs of the landowner.

The new law that Senator Trent Lott helped pass: 1) Raises the deduction a landowner can take for donating a conservation easement from 30% of their income in any year to 50%; 2) Allows qualifying farmers and ranchers to deduct up to 100% of their income; and 3) Increases the number of years over which a donor can take those deductions from 6 years to 16 years.

The bill was signed into law by President George W. Bush on August 17, 2006. It is also important to note that this only applies to easements donated in 2006 and 2007.

Also included in the bill are sensible reforms that affect the appraisal process for all donated property. The bill also tightens the rules for easements on historic buildings and structures.

According to Daniel S. Coggin, Director of the Mississippi Land Trust, "Land that qualifies for a conservation easement typically is land that is undeveloped, forested in native species or has a minimum amount of agricultural or intense timber use. This type of land will meet the basic qualification for conservation easement conveyance. In Mississippi most property currently in prairie, upland or bottomland hardwoods, mixed pine/hardwoods or longleaf pine qualifies for development of a conservation easement."

For more information on these new expanded incentives or for more information on conservation easements, please call Daniel S. Coggin of the Mississippi Land Trust, at (662) 256 4486 or visit the Trust on the web at www.misslandtrust.org. For a free copy of the Land Trust's conservation easement handbook, call (662) 686-3375.