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Conservation easement revenue question #9025354 03/27/24 01:00 PM
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SB9969 Offline OP
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I am getting a CPA to answer this question but figured I'd ask here also to get some info from those who have done this.
We are doing s conservation easement on our land and going to receive a large payment for the easement. I haven't been able to find what the tax liability on this payment is based on anywhere so am seeing a CPA soon. Has anyone done one of these and knows what the taxable amount in it is or knows someone who has done it ? I'm sure it could be based on several factors but just wanted maybe an idea. I'd assume as a conservation easement it may not be as big of a hit but I'm not sure. The neighbor next to me has one but he is older and couldn't remember. He didn't think it was a big deal on his but who knows.
Anyone go through this and have any thoughts ? Thanks for any input.

Re: Conservation easement revenue question [Re: SB9969] #9025451 03/27/24 04:38 PM
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It’s not really a payment but a tax credit. The amount is based on an appraisal of the easement that’s being donated. The most important piece is the accuracy of the appraisal.


Marc C. Helfrich
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Re: Conservation easement revenue question [Re: SB9969] #9025454 03/27/24 04:47 PM
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That part I understand but we are also getting a large monetary payment too. We aren't just donating it but being paid actual money as well. So wondered what people have paid on this in income taxes.

Re: Conservation easement revenue question [Re: SB9969] #9025475 03/27/24 05:29 PM
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Who’s paying you? The benefits of the easement is tax free withdrawal from investments or income.


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Re: Conservation easement revenue question [Re: SB9969] #9025483 03/27/24 05:53 PM
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It's a government funded program. Our land is right by Fort Hood and most of the land around it is under the program except us. It's a one time payment based on the appraisal with a percentage going to us.

Re: Conservation easement revenue question [Re: SB9969] #9025508 03/27/24 06:36 PM
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The conservation easements Im familiar with are usually thru the Nature Conservancy or a government entity like SAWS.

They usually pay around .40 cents on the dollar ( in fiat currency) of the land value for the easement. Due to the encumbrance, the property is usually appraised about 40% less, and it’s bound by the terms of the easement.

I’m not a CPA, but would assume the proceeds would be taxed as income.



For it is not the quarry that we truly seek, but the adventure.
Re: Conservation easement revenue question [Re: SB9969] #9025517 03/27/24 06:57 PM
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Thanks. This one is through NRCS. The payment is a bit more than what you mentioned. Will speak to a CPA just wasn't sure they would take at a regular capital gains type rate or your income bracket since it's a conservation type thing. Wouldn't make it quiet as worth your while at a high rate

Re: Conservation easement revenue question [Re: SB9969] #9025518 03/27/24 06:59 PM
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I do appraisals on behalf of the CLF. Your cash payment represents the value of the portion of rights you are giving up; the value of the interest acquired through the easement; things like future development, no additional structures, etc. That value is typically not taxable based on my understanding. I think you get a 1099 so its reportable, but not taxable income.

Thanks for doing your part to enhance mission security and safety of our military bases. It is a serious concern seeing watching owns what right next to some of our sensitive military interests.

Re: Conservation easement revenue question [Re: SB9969] #9025533 03/27/24 07:37 PM
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I believe conservation easements will become more popular in the future as long as the funding holds out.

They will become a cornerstone for land conservation in the face of development.

If I had large rural holdings, I would strongly consider putting them in conservation easements to protect against future development while still being able to get some cash out


For it is not the quarry that we truly seek, but the adventure.
Re: Conservation easement revenue question [Re: HuntnFly67] #9025557 03/27/24 08:22 PM
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Originally Posted by HuntnFly67
I do appraisals on behalf of the CLF. Your cash payment represents the value of the portion of rights you are giving up; the value of the interest acquired through the easement; things like future development, no additional structures, etc. That value is typically not taxable based on my understanding. I think you get a 1099 so its reportable, but not taxable income.

Thanks for doing your part to enhance mission security and safety of our military bases. It is a serious concern seeing watching owns what right next to some of our sensitive military interests.




Thank you for the info. Would be nice if it ended up with no tax. That's positive info to have and hear. It's nice to know the land will stay as it is nice down the line.

Re: Conservation easement revenue question [Re: SB9969] #9031410 04/09/24 01:25 PM
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Government payments from other programs like WRP and CRP are a taxable to landowners. There is no “basis” for you to deduct against. Both of those are conservation easements. Get a CPA that understands the program you are enrolled in even if it is not your normal CPA.

Just my 2 cents.
Big Hutch

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