Why Protect Your Land

View a testimonial from a family who protected the land they love in perpetuity.  The Robinson family has lived on this farm for almost 100 years, and they have left a family legacy for generations to come.
Hawthorn Hill Farm Conservation Easement Sign

Tax Advantages of Conservation Easements

There are many reasons to donate land or a conservation easement to the Southwest Michigan Land Conservancy, including leaving a family legacy, ensuring the land is conserved in its natural state forever, protecting the wildlife that is dependent on the land, etc.  In many situations, the donation of land as well as conservation easements comes with a variety of tax advantages. 

A conservation easement is a legal agreement which is recorded to the property deed in perpetuity that prohibits development and protects identified conservation values. Conservation values are a critical component, defined in the IRS tax code, and the basis for why IRS-qualified organizations, such as the Southwest Michigan Land Conservancy, protect land and allow landowners to be eligible for a federal tax deduction with a conservation easement donation. 

 

Income tax

To determine the potential income tax deduction for a donated conservation easement, the property owner hires a qualified appraiser who will appraise the property at its highest and best use, the unrestricted value, and then appraise the property with the restrictions of the conservation easement in place. The difference between those two appraisal values is considered a charitable donation for your personal federal income taxes which is currently up to 30% of your adjusted gross income. If the entire value of the donation is not used in the first year, the excess can be carried forward and deducted (with the 30% limit) for up to five additional years.

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Estate tax

Another incentive to placing a conservation easement on your property is the potential estate tax breaks. Too often, when the next generation inherits the family-owned land, they have to unwillingly split up the property and sell a portion of it to pay the estate taxes. A conservation easement donor is eligible for an exclusion from estate tax of up to $500,000.

 

Property tax

The final tax incentive to placing a conservation easement on your property is a property tax break for the next landowners. When transferring property on to the next generation, the property tax is uncapped and reassessed with the taxable rate readjusting or “popping-up” to the SEV, increasing the tax rate and property taxes. With Public Act 446 passed in 2006, all properties with a conservation easement are exempt from the “pop-up” tax. If a property has been under one ownership for a long time and accrues value without the property taxes rising more then 5% from one year to the next, at transfer the taxes can “pop-up” significantly. Placing a conservation easement on a property to keep the cap in place can be a strong incentive in the marketing of a property to potential buyers.

This is a brief overview of the tax advantages of placing a conservation easement on your property. To determine how a conservation easement donation may affect your taxes, consult your own professional tax and/or legal advisor. If you would like more information about conservation easements and the steps to conserving your property, check out How to Protect Your Land or contact the SWMLC land protection department.

Justin's Marsh . . .

A nature preserve given in honor of Justin Russell Mohney by his parents and grandparents

Leaving a Family Legacy . . .

In 2006, Jeffrey Mohney and his father, Dr. Russell Mohney, donated a beautiful and diverse wetland property, known as Justin's Marsh, to the Southwest Michigan Land Conservancy. The family had grown to love the property after many hunting and fishing adventures through the years.

Dr. Mohney said, "Donating Justin's Marsh to the Southwest Michigan Land Conservancy was the most appropriate way to make sure the property stays that way forever."

Jeff added, "If there's one thing I would want landowners to know, it would be that they can protect their land forever.  We had the opportunity to preserve this piece of property and to do it in honor of our son, Justin."

. . . and a home for wildlife

Justin's Marsh is 86 acres of Sugarloaf Marsh along Sugarloaf Lake south of Portage.  Sugarloaf Marsh is one of the most diverse botanical areas in the region, with one scientist putting together a preliminary plant list of over 400 species. Sugarloaf Marsh with the surrounding square mile of the Gourdneck State Game Area is the richest area in Kalamazoo County for orchids — at least 27 species of orchids have been documented.

 

 

 

 

 

 

Justin's Marsh also has a large variety of wildlife, including beaver, mink, muskrat, and every kind of flight duck and puddle duck you can imagine. The Mohney family has spotted long-tailed ducks and cackling geese, as well as widgeons and canvasbacks.