While this may be the worst of times for the financial situations of many – – for governments, businesses and persons – – it is the best of times for landowners interested in reaping financial benefits for land conservation decisions.
A refundable tax credit up to $50,000 is available for anyone who owns conservation-worthy land in Massachusetts, whether they live here or pay taxes here or not. And landowners who donate conservation restrictions in 2013 can enjoy enhanced federal tax savings that may not be available in the future. This should be exciting news for landowners. You don’t have to sell your land for development; there’s a different way to generate proceeds from your land, while keeping its integrity intact.
Since 2011, for the first time ever, landowners who engage in conservation transactions with non-profit land trusts, towns or agencies can be eligible for a powerful new tax advantage—a Mass. income tax credit worth up to $50,000.
The type of transaction (land gift, conservation restriction, bargain sale, reserved life estate) is less important than the characteristics of the land itself, so long as the land is permanently protected. OCT and The Compact of Cape Cod Conservation Trusts’ can provide a free, private analysis for landowners to determine if their land might be eligible, though state officials make the final decision. We can also prepare the paperwork. There is $2 million available statewide each year for this program.
On the federal side, landowners using a specific type of technique, the conservation restriction, to preserve all or part of their property while keeping title, are eligible for enhanced tax preference. Under rules first enacted in 2006 and ending in December 2013, landowners can spread out their charitable deduction resulting from the conservation restriction over as many as 16 years instead of the usual six years. And they can use up more of the deduction (up to 50% of adjusted gross income) in each of those 16 years, instead of the usual 30 percent. This powerful ability to accelerate and extend the tax deduction enables all landowners, even those with less income relative to the land’s value, to maximize the benefit.
OCT and other non-profit land trusts of the Cape are sponsoring free workshops for landowners to learn more details of these programs. Join us Saturday, April 13th at 9:30 – 11 am at the Harwich Community Center. Contact The Compact at 508-362-2565 or firstname.lastname@example.org for more information. Remember, the land you save just might be your own!
(prepared March 2013 by Mark H. Robinson, Executive Director of The Compact of Cape Cod Conservation Trusts, Inc.)