In order for a conservation easement to qualify for federal income tax purposes, it must meet at least one of four categories of conservation purpose identified in Section 1.170A-14(d) of the IRS Code. Two of these purposes are the most commonly utilized:
(1) “preservation of a relatively natural habitat of fish, wildlife, or plants”; and,
(2) “ preservation of certain open space” such as agricultural and forestland.
While these are purposely broad, they impose a requirement that the transaction accomplish one of these purposes. The IRS is increasingly challenging easements on lands with little or no conservation value or benefit, regardless of whether the easement lowers the value of the land. |
