Any unused balance of the gift is limited to a maximum deduction of 50 percent of the adjusted gross income each year for the next five years. Generally, where property has appreciated in value, the 30 percent option may be more advantageous. The 50 percent election is generally more appropriate for taxpayers whose property has been recently acquired and has appreciated little. Estate and Gift Taxes Conservation easements will ordinarily result in a reduction of the property value for estate and gift purposes. This can ease the financial burden of passing the property on to heirs.
Conservation easements are a significant and useful estate planning tool.
The amount of value reduction is unique to each property, but is generally the difference between its subdivision development value and its agricultural value. In the event that the property owner is a corporation, the easement gift may be deducted against 10 percent of the corporation s annual net income before the year of donation with any unused balance limited to 10 percent of the annual net income each year for the next five years. Once a conservation easement is signed, MLR and the landowner begin a working relationship to assure that the intended conservation becomes a reality. Landowners continue to make all of their property management decisions while the easement limits only the broad parameters of land use, such as subdivision, commercial development, construction and surface mining. Annual monitoring visits are conducted by MLR stewardship staff.