Maryland Landowners Can Benefit from New Conservation Easement Tax Incentive

ANNAPOLIS- Maryland landowners will soon have the opportunity to take advantage of a new federal conservation tax incentive effective for easements donated in 2006 and 2007.

Section 1206 of the Pensions Bill (HR 4) recently passed by Congress will help family farmers, ranchers, and other moderate-income landowners get a significant tax benefit for the donation of a conservation easement, restricting future development of their land to protect a resource important to the public. Most such donations are made to local, community-based land trusts dedicated to keeping land in agriculture, conserving wildlife habitats, and protecting open space and historic resources. The new legislation will:

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

* Allow qualifying farmers and ranchers to deduct up to 100 percent of their AGI; and

* Extend the carry-forward period for a donor to take tax deductions for a voluntary conservation agreement from 5 to 15 years.

Maryland resident Kathleen White, who owns a 60-acre farm on the Wye River in Queen Anne’s County, was very pleased to learn about the new tax benefits her family will receive.

“This is completely unexpected,” said White. “We granted the easement back in the spring thinking that we would only have six years to take a deduction and now we will get 16. Any help reducing the burden of taxes is really wonderful.”

“We are very pleased that Congress has made this commitment to land conservation, and we’ll be working with land trusts locally and nationwide towards making the benefit permanent,” said Maryland Environmental Trust (MET) Director Nick Williams.

To date, MET has helped landowners protect over 111,000 acres of land with more than 870 conservation easements. With the donation of an easement to MET landowners may also be entitiled to a State Income Tax Credit, Property Tax and Estate Tax Benefits. For further information, visit the MET website at or contact the Maryland Environmental Trust toll-free at 1-877-514-7900.

The new conservation tax incentive would be effective for 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.

President George W. Bush signed the Pensions Bill (including the expanded tax incentive provision) on August 17 at the White House.

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