Congress has approved a tremendous expansion of the federal conservation tax incentive for conservation easement donations that will help landowners receive a significant tax benefit for making the donation of a conservation easement. Major incentives include:

1) Raise the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%;

2) Allow qualifying farmers and ranchers to deduct up to 100% of their AGI for donating a conservation easement; and

3) Increase the number of years over which a donor can take deductions for conservation easement donations from the current five to 15. This provision is effective for easement donations made from January 1, 2006 through December 31, 2007. After that, the law would revert back to previous provisions, unless Congress extends the provision prior to the deadline.

The bill also includes reforms that affect the appraisal process for all donated property and tighten the rules for easements on historic buildings.

Minnesota’s congressional delegation was united in voting for the legislation, which was part of the broader Pension Reform Bill.

Rand Wentworth, president of the Land Trust Alliance, summed up the legislation’s journey: "What an amazing year for land conservation! A little more than a year ago, the land trust community was working hard to defend against draconian proposals by the Joint Committee on Taxation to end tax incentives for conservation donations. Today we are celebrating a tremendous victory for conservation."

While landowners are primarily motivated to protect their land because of a personal conservation ethic, the new incentives should motivate a larger group of people to protect their land by donating a conservation easement.

It is important to note that these incentives only apply to easements donated in 2006 and 2007. The Land Trust Alliance and the Minnesota Land Trust are working to make this change permanent.