Conservation Easements

What are conservation easements and how do they work?

COnservation Easements are an INcredible tool

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Here’s what you need to know

  1. Conservation easements are a voluntary legal agreement between a landowner and a land trust (typically) that limits the type of activity that can take place on the land.

  2. Conservation easements pass down with the title of the land to the next owner.

  3. Conservation easements can be different for each land owner and situation.

So What does this mean?

Let’s say that you own land in the Red River Gorge. It’s beautiful land. You like it that way. You decide to build five cabins on it. After the cabins are built, you decide it’s perfect. You never want to put another cabin on the property, and when it passes down to your kids, or you decide to sell it, you want to make sure it stays that way: just five cabins, no subdivision, logging, or other development. A conservation easement is your best friend.

The next step is to have a conversation with Red River Gorge United, explaining what you’d like to achieve with your conservation easement (what types of activities you want, in what areas, and what you would like to prohibit). After that, you work with Red River Gorge United to draft and complete a legal document, which will then be filed at the county clerk’s office along with the property deed. Then, whether the land remains in your hands or is passed on to a new owner, Red River Gorge United would check up on the land annually to ensure the conservation goals as outlined are being upheld.

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FAQS

  • Yes. There are significant tax incentives associated with conservation easements if the required steps are taken.

    You may receive tax benefits in two ways:

    1. Reduced property tax

    2. Tax deduction: Generally you can up to 50% of your AGI with a carryforward of 15 years depending on the value of the conservation easement.

  • There are a few steps required to receive tax benefits from a conservation easement.

    First you’ll need to get two appraisals of your land, one for the value of the land before the conservation easement, and another one for the value of your land after the conservation easement. The difference is the value of the conservation easement and how much you may be able to deduct from your federal taxes in the next 15 years.