WHAT IT IS: Landowners voluntarily agree to donate the development rights on their land to a qualified public agency or nonprofit organization. Landowners do not give up title to the land. Also, they may restrict public access, or sell, give or transfer their property as they desire.

HOW IT WORKS: The donation of development rights involves drafting a legally recorded agreement called a conservation easement, then conveying the easement to a public agency or nonprofit organization during the donor's life or by bequest. (See sample easement in Appendix G.) A conservation easement permanently or temporarily limits the development of all or part of the property. The recipient of the easement accepts responsibility for monitoring and enforcing the easement. Agricultural conservation easements, which are specifically designed to protect farmland, generally prohibit uses that damage agricultural value and productivity.

ADVANTAGES: Donating a conservation easement can significantly reduce the donor's federal and state income taxes, local property taxes and their heir's estate taxes. Under the Internal Revenue Service code, qualified conservation easement donations can be treated as charitable gifts, which may reduce the value of the donor's taxable estate. Also, the donation of an easement, whether during a landowner's life or by bequest, can reduce the value of the farm upon which estate taxes are calculated. Estate taxes are assessed at death on total assets greater than $600,000 for individuals.

Other benefits of donating easements include: helping maintain the viability of a region's agriculture; offering a way for people to work together to protect their area's scenery, natural resources and quality of life; and keeping land on the tax rolls.

DISADVANTAGES: In order to utilize the income tax deduction one needs fairly high income. Similarly, in order to use the estate tax deduction one must have assets totalling greater than $600,000. Often, valuable land belongs to people who will not financially benefit from donating an easement; and a source of funds for monitoring easements may need to be obtained.

CONTACTS

(See Appendix A for addresses and phone numbers)

GENERAL INFORMATION ABOUT DONATING EASEMENTS:

American Farmland Trust

LAND TRUSTS THAT MAY ACCEPT DONATED EASEMENTS: