A conservation easement is a voluntary agreement between a landowner and a non-profit organization called a land trust. The easement permanently restricts some kinds of development that can occur, on some or all of the property, to protect the land's scenic and wildlife resources.

The property owner continues to own the land, and may use it in any way compatible with the easement restrictions. The easement is perpetual, and passes with the property deed.

Donation of a conservation easement can result in significant tax benefits if the easement meets the IRS criteria.

Benefits of a Conservation Easement

The easement is a document written into or attached to the deed of a property restricting future development rights and uses of the property in manners specific to each easement. This easement is dedicated to a land trust organization that "watches over the land" to ensure no restrictions are violated. These restrictions run with the land in perpetuity and do not generally provide third party access.

When an owner places a conservation easement on a property, that owner is effectively reducing the value of the property by eliminating future development rights. The owner retains fee ownership, possession, and the use of the land. An appraiser is employed to assess the maximum developable value of the property as well as the new reduced value the property will have once the easement is in place. The difference between these two values is called the diminution value.

The diminution value, or value lost, is considered a charitable donation by the IRS as long as the organization accepting the easement is also recognized by the IRS as having this capability. Thus, a certain percentage of this donation can be used to offset federal income taxes over a six-year period depending on the owner's individual tax situation and basis. The tax benefits associated with conservation easements can effectively lower an owner's basis in the property, lower annual real estate taxes, and lower future estate taxes

Jackson Hole Land Trust

555 E. Broadway
PO Box 2897
Jackson, WY 83001
307-733-4707
www.jhlandtrust.org

The Nature Conservancy of Wyoming

Jackson Hole Office
PO Box 4879
Jackson, WY 83001
307-733-8890
www.tncwyoming.org

Teton Regional Land Trust
Teton Valley, Idaho
Mike Whitfield
PO Box 247
Driggs, ID 83422
208-354-8939
www.tetonlandtrust.org