Tax Benefits

Donations of Real Estate and Other Assets

Gifts of land or other assets to NCCT qualify for charitable tax deductions. Land or securities donations may also have important capital gains benefits. An independent appraisal by a qualified appraiser is generally required for tax benefits from donations greater than $5,000 in value.

Donations of Conservation Easements

Donation of a conservation easement can result in significant income and estate tax benefits, and may have important implications for property tax relief. As long as the donation meets federal and state tax code requirements, the donation will be treated as a charitable deduction for tax purposes. Check with your local tax assessor about potential reassessment of property restricted by a conservation easement.

How is the Value of a Conservation Easement Determined?

When a conservation easement limits or restricts uses, especially the right to subdivide or develop, the value of the land is affected. That value is determined by a qualified independent appraiser. The appraisal must be completed no earlier than 60 days prior to the contribution and no later than the donor’s deadline for filing their federal tax return.

The appraisal works as follows:
1. The land is appraised at the full market value.
2. The land is appraised again, taking into account the restrictions in the easement that limit some or all of the property’s use or development rights.
3. The difference between these two figures is the value of the conservation easement.

Example of Conservation Easement Value

Appraised full, fair-market value of property before the easement: $202,000.

Appraised full, fair-market value of property with easement in place: $151,000.

Value of the conservation easement as a charitable contribution: $202,000-$151,000 = $51,000.