Tax incentives ease path for easement donors

RELEASE: Aug. 24, 2007 – Volume XXXVII, No. 34

Our country’s tax system has lots of good incentives to encourage charitable giving. One highly successful incentive gives tax breaks to landowners for permanently preserving their lands. Hundreds of thousands of acres of valuable farmland, wetlands, forests and open spaces have been preserved this way. Congress temporarily expanded these tax incentives to make them even more financially beneficial, but only during 2007. To make the new tax incentives permanent, we must act now!

Under the new tax incentives, landowners can deduct easement donations equivalent to 50 percent of their adjusted gross income, a 66 percent increase over the previous law; and qualifying farmers can deduct up to 100 percent of their adjusted gross income. In addition, donors can carry forward the value of their donation for 15 years, rather than the five years allowed under the previous law. But these new conservation incentives will sunset at the end of 2007.

Conservation easements are now integral to land preservation efforts across the country. In their simplest form, easements are binding agreements signed by the landowner. The agreement forfeits or retires the rights to develop their land. The easement is recorded as a restriction on the deed, which is then permanently tied to the land, no matter who owns the land in the future.

Easements can stretch preservation dollars – and save New Jerseyans tax dollars – because they are generally less expensive than buying the land itself. In states with high land values like New Jersey, easements can be helpful tools in the race to preserve open space and farmland.

In Washington DC, legislation designed to make these incentives permanent was introduced by Senator Max Baucus of Montana (S. 469) and Representative Mike Thomson of California (H.R. 1576). The bills currently have 18 and 79 co-sponsors respectively – a great show of support, but not enough to ensure passage. President Bush has also endorsed making the incentives permanent in his proposed 2008 budget. From New Jersey, so far only Representatives E. Scott Garrett (5th District) and Jim Saxton (3rd District) have signed on.

During the month of August, most members of Congress are back in their home districts. It’s a great time to reach out and encourage them to make the expanded conservation tax incentives permanent. You can find their local telephone numbers, or at www.house.gov and www.senate.gov.

If you live in the 3rd or 5th Districts, call and thank Jim Saxton (3rd) and Scott Garrett (5th) for their support. Otherwise, call and ask your representative to co-sponsor H.R. 1576. And every New Jersey voter should ask Senators Lautenberg and Menendez to co-sponsor S. 469.

You can learn a great deal more about the details of the new tax incentives from the national Land Trust Alliance. Their website is an excellent starting point; log on visit www.lta.org and click on the link under “Policy Update” (you can get there directly at http://www.lta.org/publicpolicy/tax_incentives_updates.htm). And I hope you’ll contact me at info@njconservation.org, or visit NJCF’s website at www.njconservation.org, for more information about conserving New Jersey’s precious land and natural resources.

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