Op-Ed | Conserving Land and Saving Taxpayers Billions

Submitted on Mon, 01/23/2023 - 14:43

Wenatchee World | Jan 20, 2023 | by Suzanne Hartman, Board Member / Micky Fleming Lands Program Manager Chelan-Douglas Land Trust
In the waning hours of the 117th Congress on December 23, 2022, the Omnibus Spending Bill was passed. Buried deep within that bill was legislation known as The Charitable Conservation Easement Program Integrity Act (H.R. 4164/S. 2256). Not something that grabbed the headlines at year’s end.

Yet, this legislation is very important to us here in North Central Washington. Why? Because it provides federal income tax deductions for legitimate conservation easements that allow landowners to protect their land into the future while still retaining ownership, use and control of their land, and the ability to sell it or pass it on to their heirs. Sadly, this federal land conversation tax deduction incentive has been abused by bad actors who formed syndicates to realize billions of dollars in illegal tax incentives.

Passing the Conservation Easement Integrity Act means that landowners who want to see their lands remain undeveloped in perpetuity can take a charitable deduction based on the fair market value of their donated conservation easement. This makes conservation a real option for many land-rich landowners who want to see their land preserved.

During the last 20 years, the Chelan-Douglas Land Trust has received several conservation easements that were donated outright or donated in part by selling the easement at a substantial discount. These conservation easements permanently preserve thousands of acres of wildlife habitat, open space and viewscapes that benefit our entire community. CDLT’s Cashmere Canyons project was possible only by virtue of the landowner’s conservation easement donation that matched a state grant to construct the trailhead on Nahahum Canyon Road. These are examples of good conservation easements with permanent benefits that enable landowners to legitimately reduce federal income tax by donating a conservation easement to a qualified conservation organization like CDLT. CDLT is a nationally accredited land trust with “zero tolerance” of fraudulent donations.

While protecting landowners, this new law squarely prohibits syndicated tax deduction schemes. It sets a tax deduction limit for qualifying conservation contributions. In particular, it targets certain partnerships (e.g. syndicates and “S” corporations) to cap the incentive of each partner’s “share” of the conservation easement deduction.

This federal tax incentive is one of the most powerful conversation tools available to local land trusts and landowners. A landowner receives the tax deduction and the land trust is responsible for ensuring that the land and/or structures meet the conditions of the conservation easement. Eliminating the ability for syndicates or others to take advantage of this incentive. It will end up saving taxpayers billions in unwarranted incentives, while continuing to provide individual legitimate landowners a beneficial tool to use for their own land conservation IRS estimates that between 2010 and 2018 syndicates claimed as much as $36 billion in tax deduction schemes. The just-passed legislation prevents that.

If you or someone you know is interested in learning more about a charitable conservation easement, let us know. The Chelan-Douglas Land Trust can work with you to determine if this program is right for you and your family.