Tax Advantages

What are the tax advantages of working with a land trust?

Income tax benefits

If you make a gift of land or a conservation easement to a public agency or a land trust, you may be able to deduct the fair market value of that donation on your income taxes.

Estate tax benefits

Many heirs to large tracts of open space, farms, natural areas, or timberland face substantial estate taxes.

Estate tax is levied on a property’s “highest and best use”—usually the amount a developer or speculator would pay. Thee resulting tax burden can be so large that the heirs must sell the property to pay the taxes.

A conservation easement can reduce estate taxes because the donation of the easement reduces the economic value of the property.

Property tax benefits

Local real estate property tax assessments are based on a property’s full-market value, which takes into account the property’s development potential.

If a conservation easement reduces or removes this potential, the assessment and, accordingly, the amount of real property taxes, may be reduced.