Tax incentive action touted

December 27, 2010
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Congress just renewed a tax incentive for private landowners — especially working family farmers and ranchers — who protect their land with a voluntary conservation agreement. The incentive, which expired at the end of 2009, helped the Land Conservancy of West Michigan work with willing landowners in their eight county service areas to conserve more than 3,401 natural acres between 2006 and 2009.

Conservation-minded landowners now have until Dec. 31, 2011, to take advantage of a significant tax deduction for donating a voluntary conservation agreement to permanently protect important natural or historic resources on their land. When landowners donate a conservation easement to LCWM, they maintain ownership and management of their land and can sell or pass the land on to their heirs, while foregoing future development rights.

The enhanced incentive applies to a landowner’s federal income tax. It:

  • Raises the deduction a donor can take for donating a voluntary conservation agreement from 30 percent of their income in any year to 50 percent.

  • Allows farmers and ranchers to deduct up to 100 percent of their income.

  • Increases the number of years over which a donor can take deductions from six to 16 years.

By donating conservation easements and protecting their private land, landowners benefit the West Michigan community now and for future generations. A big thank you goes to Congress for making this important conservation tax incentive available.

In West Michigan the incentive is having a real impact. For example, in 2009, a husband and wife donated a conservation easement on their land on the Muskegon River. As determined by a qualified appraiser, the conservation easement donation was worth $360,000. Because of these increased incentives allowing the landowners to take the gift against 50 percent of the couple’s gross income of $80,000, they were able to take the contribution against $40,000 (50 percent of AGI) instead of the previous $24,000 (30 percent).

Also, they will be able to extend their contribution over a total of nine years ($40,000 for nine years) for the full gift of $360,000, instead of the previous incentive cap at six total years, thus allowing the landowners to fully capture their gift. If capped at six years, the landowners would have only realized $144,000, or 40 percent of their conservation easement value. 

To learn more about preserving your private land, contact the Land Conservancy of West Michigan at (616) 451-9476 or visit www.naturenearby.org.

Peter Homeyer is executive director of the Land Conservancy of West Michigan, a local, nonprofit organization that preserves natural land and open space in eight West Michigan counties.

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