|
LAND OWNER INFORMATION
Various Benefits
Qualifying Criteria
Steps To Setting up A Conservation Agreement
Costs Of Protecting Land Through a Conservation Easement
Economic Benefits
Pension Protection Act
Print out our Land Owner Packet for your viewing and printing.
For more information, contact our office here.
Various Benefits:
- Obtain a more financially attractive return from a land gift, yet still preserve its natural beauty.
- Helps land owners keep the historic family lands away from development.
- Encourages private landowners to voluntarily protect valuable land that makes up the beautiful state of Tennessee.
- Benefits landowners of all income levels.
- Knowledge that the land’s special features will be protected forever!
- Conservation Agreements provide the public benefits at a fraction of the cost of outright purchasing lands by a community for conservation.
AMERICA AND THE STATE OF TENNESSEE NEEDS VOLUNTARY, PRIVATE LAND CONSERVATION.
- By protecting private property for public benefit, private landowners play an important part in preserving America’s natural heritage for future generations.
- Voluntary conservation agreements, known as conservation easements, protect working farms and ranches and allow families to leave the land to their children.
- Voluntary conservation agreements respect private property rights while providing the public benefit of protecting America’s natural heritage.
- Private conservation donations have resulted in millions of acres being protected for farming, ranching, forestry, hunting and fishing.
- Voluntary conservation donations give individuals a choice about how best to conserve clean water, natural areas and traditional ways of life that are important to them.
- Voluntary conservation agreements keep land on the tax rolls, preserving revenue for local schools and providing cost-effective, non-regulatory conservation.
Qualifying Criteria:
In order for property to qualify for selection it must meet ALL of the following criteria: The property is in a relatively undisturbed natural, scenic, and historic location. Or the land has recreational value and/or agricultural value. The property must also be sufficient in size that its conservation resources are likely to remain intact, even if adjacent properties are developed, or sufficient neighboring property is either protected or could be included as to have the same effect. Protection of the property must promote land conservation and encourage careful stewardship of land and water resources.
To qualify for consideration property must meet one or more of these criteria:
- Contributes to protection of lands in furtherance of government plans or policies
- Contains endangered, threatened, rare species, or natural communities
- Contains relatively natural wildlife habitat, ecosystems, or natural features
- Contains or has potential to contain natural features of educational or scientific value
- Is in active agricultural use or provides an example of historic agricultural use
- Contains wetlands, floodplains, waterways, riparian corridors, aquifer recharge areas, watershed or other lands necessary for protection of water supply, water resources or wetland habitat
- Buffers agricultural land, wetlands, wildlife habitats, or other sensitive areas
- Provides a buffer for and is either close or contiguous to existing conservation easement, park, preserve or other protected land
- Protects scenic views from public roadways, waterways, or recreation areas
- Public access for educational or recreational use allowed
- Sets an important precedent for resource or open space protection in a targeted area
- Provides a connection to other open protected/open space land that is important for movement of wildlife between habitats or through developed corridors so that natural areas do not become isolated “islands”
- Has either historic or archaeological value, or is adjacent to and a buffer for such lands
- Contains unique or outstanding physiographic characteristics
- Offers significant relief from urban closeness and/or helps define community character or form
Steps To Setting up A Conservation Agreement:
Step 1. You and a LTTN representative take a tour of your property.
On this introductory visit, you and the staff member or trained volunteer from LTTN will have the opportunity to see the property, to discuss your conservation goals, and to address conservation options. You will already have received and completed the "Landowner’s Questionnaire" prior to that visit, so the information about your land and conservation goals will be available to LTTN representative.
Step 2. LTTN reviews your property and conservation goals with the Projects Committee.
The Projects Committee of the Board of Directors reviews all potential land protection projects with the staff to determine if it is appropriate for LTTN to pursue the easement at this time.
Step 3. You consult your legal and tax advisors.
It is your responsibility to review the legal and financial implications and benefits of donating a conservation easement. LTTN can provide you with a list of local advisors familiar with this process, but you are urged to work with those advisors with whom you are comfortable and who will give you the best advice for your personal situation. You will want advice on income and estate tax issues, and the way in which to take maximum advantage of the benefits possible through a conservation easement. You may also want to have an informal consultation with a qualified appraiser. Doing this early in the process will help you to gain a general understanding of the value of the restrictions under discussion.
Step 4. LTTN compiles a baseline documentation report of the property.
Basic documentation needs to be completed for every conservation easement we accept, since it is the "present condition of the land" that gives us background for continued monitoring. Many of the easements that we accept are set up to qualify as tax-deductible charitable gifts to The Land Trust for Tennessee as a qualified, non-profit, § 501(c)(3) organization. The value of the development rights relinquished through the easement is considered the value of the charitable gift. To comply with IRS regulations, a record of the condition of the property at the time of the donation is required. We call this the "baseline documentation report. " It will include photographs, surveys and other important information to represent fully the property and its special features. LTTN representatives complete this record of the property during site visits with you and those you designate.
Step 5. You provide legal information to LTTN.
LTTN will need title information to identify the owner(s) of the property and the legal description of the land to be included in the conservation easement. You will also provide information on any liens or mortgages that may exist on the property.
Step 6. You obtain a mortgage subordination for the property.
If your property is subject to a pre-existing mortgage, you are responsible for obtaining a subordination from the lender in order for LTTN to be able to accept the easement. We will assist you in explaining to the lender the benefit of the easement to the community-at-large and the charitable purpose of the donation.
Step 7. Together we negotiate the restrictions and draft the easement.
Throughout the steps listed above, you and LTTN will have developed a good idea of what type of activities will be restricted by this easement as well as what continued uses of the land you desire. At this time, the draft conservation easement will be prepared by LTTN. Your legal advisors and LTTN will review the document to be sure that both our interests are served. As this is a legal document, and one that will be attached to the property forever, careful discussion and scrutiny is vital to ensure our mutual satisfaction with the long-term implications of the easement.
Step 8. You obtain a qualified appraisal.
An accurate appraisal is key to understanding what the conservation easement is worth as a charitable donation to LTTN, and thus what the tax benefits may be to you and your family. As the property owner, it is your responsibility to obtain this appraisal. After this has been done, no more than 60 days may elapse before the conservation easement document is signed. The final appraisal, then, will be based on the restrictions placed on the property in the conservation easement document.
Step 9. The Land Trust for Tennessee Board of Directors is asked for formal acceptance of the conservation easement.
Both the Board of the Directors of LTTN and a subsidiary committee are authorized to approve acceptance of the conservation easement donation. Meetings are held regularly to review activities of LTTN and to approve receipt of conservation easements.
Step 10. We both sign and record the easement.
When both parties have agreed to all the terms and the wording of the easement, it is time for both to sign the document. You, as the owner, will sign it, as will the authorized representative for The Land Trust for Tennessee. The conservation easement is recorded by the attorney at the county courthouse, becoming part of the recorded title to the land. This conservation easement is in perpetuity. It will be part of every sale or transfer of this property from this day forward and should be included in the addendum of any appraisal performed after the easement is in place.
Step 11. The Land Trust for Tennessee provides stewardship of the conservation easement.
From this point on, LTTN is responsible for monitoring the specifics of the conservation easement to protect your land. This usually means an annual visit and review, although a complex conservation easement may require more frequent monitoring. Also, at each transfer of the property’s ownership, a representative of The Land Trust for Tennessee will contact the new property owner to review the stewardship responsibilities as they are set out in the easement.
COSTS OF PROTECTING LAND THROUGH A CONSERVATION EASEMENT:
The Land Trust for Tennessee is frequently asked, "Is there a fee for your services?" The short answer is no. LTTN does not charge a fee for assisting landowners in preserving their properties through the use of conservation easements. The longer answer is that we do ask our landowners to consider the costs that our non-profit organization incurs during the process of establishing each individualized conservation easement, and even more importantly, those entailed in protecting each easement in perpetuity.
Each project requires staff and volunteer time, telephone calls, travel costs, materials and office systems, and so forth. There are also the costs involved in annually monitoring properties, and in being prepared to defend an easement against any legal challenges that may arise. To assure that LTTN is always able to meet the short and long-term expenses of keeping our promise to you to protect your land forever, we ask you to consider contributing to our Stewardship Fund at the time you establish your easement. LTTN is also supported by an Annual Campaign that may fit in with your charitable interests as well. All contributions to The Land Trust for Tennessee are eligible to be tax deductible.
Because we advise you to consult with a number of professional advisors prior to signing a conservation easement, you should expect to incur costs associated with those professionals’ fees. They typically include:
- Appraiser to determine the value of the conservation easement.
- Attorney to review LTTN draft conservation easement, consult with you, provide the legal description, and verify a clear title to the land.
- Accountant or attorney to review the income tax implications of the donation and the estate planning implications and benefits of the easement donation.
- Surveyor to survey the land.
Economic Benefits:
The enhanced easement incentive expired December 31, 2009, but we believe it's very likely Congress will renew it in 2010 and make it retroactive to January 1st. (The Senate just passed this!) Even if Congress fails to act, conservation easement donations are still deductible, but deductions would be limited to 30% of the donor's adjusted gross income with a 5-year carry-over. C-corporations deductions will be limited to 10% of their AGI and, under a separate expired provision, S-corporation shareholder deductions are limited to their basis in the donated property. The 2006 appraisal rules do not expire.
We're optimistic the incentive will be renewed, so this page includes how to use this valuable conservation tool.
If you own land with important natural or historic resources, donating a voluntary conservation easement can be one of the smartest ways to conserve the land you love, while maintaining your private property rights and possibly realizing significant federal tax benefits.
The enhanced incentive:
- Raises the deduction a donor can take for donating a conservation easement from 30 percent of his or her income in any year to 50 percent;
- Allows qualifying farmers and ranchers to deduct up to 100 percent of their income; and
- Extends the carry-forward period for a donor to take tax deductions for a voluntary conservation agreement from 5 to 15 years.
This is a powerful tool for allowing modest-income donors to receive greater credit for donating a very valuable conservation easement on property they own. For land trusts, this translates to the possibility of protecting much more land through the use of conservation easements.
Why is it so important that the tax incentive be made permanent?
It seems like people will conserve their land if they want to, and they won’t conserve it if they don’t want to.
All of us want to preserve the land we love and protect America’s natural heritage. If this new tax incentive becomes permanent it will make conservation easements more attractive and accessible to family farmers, ranchers and other moderate income landowners. Private conservation donations have resulted in millions of acres being protected for farming, ranching, forestry, hunting and fishing. Conservation agreements are a great way to respect private property rights while providing the public benefit of protecting America’s open spaces.
Will this tax incentive that expired in December, 2009 become permanent?
Despite support from majorities of both parties, the powerful enhanced tax incentive for conservation easement donations expired at the end of 2009! Congress appears likely to renew that incentive within weeks, but we need your help making it permanent and enacting other tax incentives for conservation at the state and federal level. The broad coalition of organizations that worked to institute the tax incentive increase are currently working to make them permanent. Read more about Tax Policy for Land Conservation.
We strongly believe a voluntary conservation agreement is a sound choice to help protect America's natural heritage and allow farmers and ranchers to continue working their land. But this is a serious decision that shouldn't be rushed. You should contact The Land Trust for Tennessee if you are interested in pursuing this option
The increased incentives demonstrate that Americans value private, voluntary land conservation and want to see it continued.
If these expanded tax incentives are made permanent family farmers, ranchers, and other moderate-income landowners will be able to conserve the land they love while obtaining a significant tax benefit for making the charitable donation of a conservation easement.
See the resources listed below for more information about the economic benefits of open space protection.
Tax Incentive Link
If these expanded tax incentives are made permanent family farmers, ranchers, and other moderate-income landowners will be able to conserve the land they love while obtaining a significant tax benefit for making the charitable donation of a conservation easement.
Learn more at the Land Trust Alliance website.
|
