Granting a conservation easement fulfills a universal desire to see the land’s natural and productive values maintained. Families use easements to provide ranching opportunities for a new generation. Communities use easements to maintain the viability of the region’s agricultural economic base and to preserve its rural character.
When a conservation easement meets federal requirements as a charitable gift, the donor may be entitled to a reduction in income and estate taxes. The size of the reduction is related to the value of the conservation easement. A qualified appraiser establishes the property value without a conservation easement and again after the development restrictions are set. The difference between the two is the value of the easement.
This amount is available as an income tax deduction according to the rules governing charitable contributions. The value of conservation easements vary widely in the west depending on the terms of the agreement and the area’s development pressure. Removing development rights brings the land’s value closer to its agricultural potential, which can substantially reduce inheritance taxes.