Christmas comes early with renewal of tax incentives for conservation
December 23, 2010
CHEYENNE – Private landowners – and especially family farmers and ranchers – are receiving an early Christmas gift as the beneficiaries of a renewed federal tax incentive for conservation easements in effect through Dec. 31, 2011 and retroactive to Jan. 1, 2010.
The incentive, which had expired at the end of 2009, has helped the Wyoming Stock Growers Agricultural Land Trust work with Wyoming landowners to conserve 148,000 acres of agricultural land and natural resources. The reinstated incentive will cover any conservation easements donated in 2010 through 2011.
“These tax incentives are designed to benefit working ranchers and farmers – families whose income is derived primarily from their agricultural operation. In these challenging times it is critical that Wyoming’s ag community has the broadest range of financial tools available,” Stock Growers Ag Land Trust Executive Director Pamela Dewell said.
The renewal of tax incentives for conservation will aid in the protection of millions of acres of the nation’s agricultural lands and open spaces. These incentives allow modest-income landowners to receive significant tax savings for donating conservation easements that permanently protect important natural resources on their lands.
When landowners donate conservation easements to a land trust such as the Stock Growers Ag Land Trust, they maintain ownership and management of their land and can pass the land on to their heirs, while foregoing their rights to develop the land. In doing so, the value of their property is reduced which can help families with estate planning or enable ranch sales to other working ranchers.
The enhanced incentive, which applies to a landowner’s federal income tax:
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• Raises the deduction a donor can take for donating a voluntary conservation agreement from 30 percent of their income in any year to 50 percent;
• Allows landowners who earn more than 50 percent of their income from farming and ranching to use a conservation easement deduction against 100 percent of their income; and
• Increases the number of years over which a donor can claim a deduction from six to 16 years.
Nearly three years ago, legislation cosponsored by Sen. Mike Enzi (R), Sen. John Barrasso (R) and Rep. Cynthia Lummis (R) sought to make the federal tax incentive for donations of conservation easements permanent. This proposal was defeated, but the current tax bill will extend these incentives until the end of 2011.
Last year, when the bill was introduced, Enzi praised the measure. “This incentive is a win-win opportunity for family farmers, ranchers and conservationists in the Cowboy State,” he said upon co-sponsoring the bill. “I worked hard to make this idea a reality when it was originally created and I am proud to support private, voluntary land conservation.”
Barrasso also supports the benefits of prolonging the benefits conservation easement donors receive.
“Voluntary incentives for working ranchers are an important tool in Wyoming,” Barrasso said last year. “Providing a permanent tax incentive for conservation easements is a great way to encourage conservation efforts while also reducing the tax burden on hard-working families.”
Representative Lummis was an original cosponsor of the legislation in the House and has seen firsthand how conservation easements can benefit Wyoming agriculture.
“As a former Board Member of the Wyoming Stock Growers Agricultural Land Trust, I have seen how conservation easements can be an important tool for working ranch families,” she said in 2009. “They can be used as a component of estate planning and help ease the transfer of family ranches from one generation to the next. And most importantly, they help us to maintain the wide-open spaces, working ranchlands and western heritage that we all love about Wyoming.”