Napier & Company, LCC

Qualified Conservation Contribution

If you own real property, you may be able to claim a charitable deduction by placing conservation restrictions on the real estate. This is true even if you continue to use the property. This can be done through a “qualified conservation contribution.”
Here is how it works:

To qualify, you must grant an easement on the property to a charitable organization or governmental unit that is committed to protecting the gift.

The gift must be for one of the following conservation purposes:

• Preserving land areas for outdoor recreation by, or the education of, the general public. This includes preserving a water area for boating or fishing, or preserving a nature or hiking trail. The public recreation or education use must be substantial and regular.

• Protecting a significant natural habitat of fish, wildlife, plants, or a similar ecosystem. Public access may be restricted, e.g., to protect the habitat.

• Preserving open space (including farmland and forest land) for the general public's scenic enjoyment or under a governmental policy. The public must receive a significant benefit.

• Preserving a historically important land area or a certified historic structure. In this case, an easement on a private residence may qualify.

The amount of the charitable deduction is equal to the value of the donated easement. Comparisons to the value of similar easements can be made to order to determine this value. In addition to an income tax deduction, there may also be possible estate tax benefits.