The Basics  An easement allows the exercise of rights on another’s property  Property illustrated as a bundle of sticks  Executed as a deed  The deed.

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Presentation transcript:

The Basics  An easement allows the exercise of rights on another’s property  Property illustrated as a bundle of sticks  Executed as a deed  The deed describes the parameters  Parties  Restrictions  Gained rights

The Basics  Most conservation easements are voluntary  But… in certain circumstances it depends on who you ask  May be gladly entered into  Donations  Tax benefits  Some may feel coerced  Thrown in as an incentive for a permit approval

The Basics  The Parties  Grantor  Property owner  Grants easement to another party  Gives up certain property  Grantee  A qualified conservation organization  A Public Agency  Gains rights to enforce and monitor easement

The Purpose & Benefits  Preserves status of land  In most cases, leaves land in private ownership (and continued partial use)  Can be as flexible as need be  Whole or part of parcel / lot  Restrictions can be negotiated among parties  Can be sold or donated

The Benefits (to the owner)  State Conservation Tax Credits  A response to perceived federal ineffectiveness  Not all states allow such credits  Provides greater flexibility to owners regarding tax benefits (relative to federal benefits)

The Benefits (to the owner)  SCTCs based on three  Calculation of tax credit value  Caps on maximum values  Number of years one may rollover the credit

The Benefits (to the owner)  Calculation of credit value  Based on the decrease in market value  In NC: 25% of fair market value of donated property interest  Based on negotiation costs  Property tax value  Local tax written off of state tax liability

The Benefits (to the owner)  Caps on maximum value  No limit (South Carolina)  High Limits  North Carolina ($500,000 for individuals and corporations)  Colorado ($375,000)  Low Limits  Maryland ($80,000)

The Benefits (to the owner)  Carry-forward periods  Allows beneficiary of credit to use credit over a period of years  5 years is most typical  $50,000 benefit -- $10,000 annual tax liability  Can get rid of state tax liability over a five year period

Some Federal Tax Benefits  Income Tax Charitable Contribution Deductions  Based on the reduction in the land’s value after easement  Up to 50% of adjusted gross income  Up to 100% for farmers & ranchers  16 year carry-forward period