Conservation easements can be a used to reduce tax liability if a taxpayer owns land that is not intended for development, though the use of conservation easements has come under some scrutiny by the IRS.
What Is a Conservation Easement?
A conservation easement is a restriction on the owner's use of the property. A popular form is the open space or scenic easement, wherein the owner of land agrees to set the land aside to preserve natural, scenic, historic, scientific and recreational areas, for public enjoyment.
The deductible value of the easement is generally determined using a "before and after" approach. That is, the value of the total property owned by the taxpayer (including adjacent property that is not encumbered by the easement) before granting the easement is determined. Then, the value of the property after granting the easement is subtracted to determine the value of the easement.
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Katie Rass
Katie Rass is executive managing editor of ThinkAdvisor, where she oversees copy editing and content strategy. She joined the site as managing editor in 2012 from Dow Jones Newswires, where she covered corporate earnings and other financial news. Earlier, Katie worked at The New York Times News Service, where her work on publications including The International Weekly and The Times Digest was seen by millions of readers around the world and on the International Space Station. She did a stint on the financial desk of The International Herald Tribune, now The International New York Times, in Paris, where she edited front-page news on the euro crisis. Katie started her career at the Eau Claire Leader-Telegram as a reporter and editor while earning a bachelor's degree in journalism and Spanish at the University of Wisconsin-Eau Claire. She is an alumna of the Dow Jones News Fund editing internship program.
