New IRS Regulations to Impact Tax Credits for Landowners

The IRS and U.S. Treasury Department issued final regulations that will drastically erode state tax incentives for landowners who donate land or conservation easements to land trusts.This rule will require state income tax credits (like the Virginia Land Preservation Tax Credit) to be counted as  quid pro quo for charitable contributions, which will lower the donor’s federal income tax deduction.
Under the new rule, if a landowner donates a $100,000 easement and gets $40,000 in Virginia tax credits, they will now only be able to take a $60,000 federal income tax deduction (previously they were able to deduct the entire $100,000 donation value).
The new rule drastically reduces an important incentive for donors and will slow the rate of land conservation. While it is very unfortunate that this has happened, the New River Land Trust is currently working on a number of exciting conservation projects. Changes like this new rule are one of the reasons we’ve chosen to diversify the type of conservation work we do, including branching out into projects that include public access as a goal.
The New River Land Trust will work with the Land Trust Alliance and other organizations on any legislative remedies that will change this state of affairs. We will keep you posted on on any updates to the situation (to be added to our email list, please visit http://newriverlandtrust.org/subscribe/).
In spite of these changes, we will continue to work on conserving our natural resources and heritage in the New River region.