Have you ever thought about conserving the fields, forests, or wetlands on your property? Donating land or a conservation restriction to a land conservation organization or agency is one way to do so.

Conservation restrictions leave the ownership of the land in your hands while permanently protecting important natural resources. You can continue to live on and use your property for activities such as farming, harvesting timber, and hunting, while ensuring that the land you love stays protected from housing and other development for future generations. Later, if your land is transferred or sold, the conservation restriction stays with the land. More about Conservation Restrictions.

Federal Income Tax Benefit for Conservation Restriction Donation or Bargain Sale

If you choose to donate a conservation restriction or sell a conservation restriction at below fair market value (known as a bargain sale), you now have an opportunity to save money through a federal income tax benefit recently extended until December 2011 while protecting your land.

The conservation restriction federal income tax benefit:

• Allows a deduction equal to 50% of your adjusted gross income (increased from 30%) for the value of a conservation restriction donated by a landowner to an eligible land trust, state agency, municipality or other qualified organization.
  
• Extends the time a landowner can apply any excess deduction to 15 additional years (up from 5).

The fair market value of the conservation restriction must be determined by a qualified independent appraiser. This new tax deduction ends December 31, 2011. For more information, call Al Futterman, NRWA Land Programs and Outreach Director, at (978) 448-0299, or your local/regional land trust. The NRWA can get you the contact info for a land trust working in your community, or you can visit Mass Woods and type in your zip code. Please note that the NRWA is not qualified to offer tax advice and landowners must consult with their own accountant or tax attorney.

Massachusetts State Income Tax Credit for Conservation Restriction Donation, Bargain Sale or Life Estate

In 2011 and 2012, landowners can apply for a Massachusetts Income Tax Credit if you donate land or a conservation restriction, sell land or a conservation restriction at a reduced value, or give land or a conservation restriction by a life estate. The tax credit:

• Is limited to 50% of fair market value of land or conservation restriction as determined by a qualified independent appraisal, or $50,000 maximum credit, whichever is less.
  
• Applies to your state tax liability during the year of the donation. If your tax credit is larger than your tax liability, the state will issue a check for the remainder of the approved credit.
  
• Can be utilized in addition to claiming the federal income tax deduction for a gift of land or conservation restriction as described above.
  
• Does not apply to all land conservation transactions: The state must still issue guidelines for this incentive, and the land must meet criteria to be determined by the state.

To read more about MA State Income Tax Credit for Land Conservation. Please note that the NRWA is not qualified to offer tax advice and landowners must consult with their own accountant or tax attorney.

If you would like more information about land conservation options and tax credits for land conservation, please contact Al Futterman, NRWA Land Programs and Outreach Director, at (978) 448-0299, or email Al Futterman.

Fields and woods near Fitchburg, MA.