Definition
A conservation easement is a permanent restriction on the use of land, donated to a qualified organization, that can generate a charitable deduction.
How It Works
A landowner gives up certain development rights permanently to preserve the land, and the value of those forgone rights can be deductible as a charitable contribution. Legitimate easements serve genuine conservation purposes.
Example
A landowner permanently restricts development on a tract of ecologically valuable land and claims a deduction based on the appraised value of the rights given up.
Who It Applies To
Landowners with property suited to conservation.
Watch-Outs
Abusive syndicated conservation easements that inflate valuations have drawn heavy IRS enforcement and litigation. Valuation, appraisal quality, and genuine conservation purpose are critical, and aggressive deals carry significant audit and penalty risk.
