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Renewal of Conservation Tax Incentive Aids New River Landowners

PULASKI – Farmers in Pulaski and surrounding counties who want to conserve their family farms can now benefit from a recent tax change that could eliminate their federal taxes for years if they donate a voluntary conservation agreement. 

Farmers can deduct up to 100 percent of their income in computing their federal taxes if they donate a permanent conservation easement on their farms. Other landowners who conserve their land can wipe out 50 percent of their gross income in paying their federal taxes. Both can continue to benefit from Virginia’s generous conservation tax credit that can be sold for thousands of dollars in cash.

The New River Land Trust has helped 140 landowners in Pulaski and other counties in the New River region conserve more than 30,000 acres of productive farms, forests and wildlife habitat between 2006 and 2011 with this generous tax incentive, which had expired at the end of 2011.

Congress’ recent “fiscal cliff” deal renewed this major tax incentive for one year for working farmers and landowners who want to conserve their land with a voluntary conservation agreement.

Conservation-minded landowners now have until Dec. 31, 2013 to take advantage of this significant federal tax deduction for donating a voluntary conservation agreement to permanently protect important natural or historic resources on their land. In addition, landowners receive a generous Virginia tax credit that can be sold for cash for conserving their farms and forests.

“Many modest-income donors, particularly farmers and ranchers, really couldn’t afford to donate under the old rules that were in place, and many others never started planning for a donation because they didn’t know what the rules were going to be,” said Russell Shay with the national Land Trust Alliance. “The certainty—at least through year-end—should help spur donations of conservation easements again.”

The enhanced incentive applies to a landowner’s federal income tax. It does the following:

  • Raises the tax deduction a donor can take for donating a voluntary conservation agreement from 30% of their income in any year to 50%;
  • Allows farmers to deduct up to 100% of their income; and
  • Increases the number of years over which a donor can take deductions from 6 to 16 years.

When landowners work with the New River Land Trust and the Virginia Outdoors Foundation to donate a conservation easement, they maintain ownership and management of their land, while foregoing future development rights.   They can sell their land or pass the land on to their heirs, confident that the conservation restrictions will permanently protect their farm or mountainside.

Ann-Margaret Shorrt of Floyd County, the Land Trust’s board president, knows personally how tax incentives and Virginia’s conservation tax credit can help a farm family.  Shortt, whose family has farmed in Floyd County since 1805, is married to George Slusher, whose farm family traces back for eight generations in the county to 1802.

“My husband’s family placed a conservation easement on their farm in Floyd County several years ago,” said Shortt. “By selling the state tax credits earned from the easement and using the federal tax incentives, my father-in-law was able to live the last years of his life at home, and my mother-in-law lived out her last years on the family farm she loved.”

 

In the coming months, New River Land Trust Executive Director John Eustis will be working with several landowners who are considering conservation easements for their family farms but have been waiting to see if Congress would extend the enhanced tax incentives that particularly benefit full-time farmers.

“Our whole community wins when thoughtful landowners conserve their land this way, protecting wildlife habitat, clean drinking water, scenic landscapes, recreational spaces, and productive agricultural lands,” said Eustis.  “Conservation agreements have become an important tool nationally for protecting our watersheds, farms and forests, increasing the pace of private land conservation by a third – to over a million acres a year.”

Landowners interested in finding out more about how they can take advantage of this tax incentive and conserve their farmland, forests, river frontage and wildlife habitat can contact Eustis at (540) 951-1704 or joeustis@newriverlandtrust.org.

The enhanced federal tax deduction can provide years of reduced federal taxes – or eliminate federal taxes for many years – for local landowners whether they are farmers or not.

“My brother and I placed an easement on our great-grandfather’s farm in 2006, the same year that Congress first approved this increased federal tax deduction,” said Beth Obenshain, the former executive director of the New River Land Trust Executive.  “For me, as a retiree with a modest income, this deduction allowed me to cut my federal tax bill in half for years. Plus the state tax credit completely eliminated by state income taxes for years.  These incentives are real and you feel them in your pocketbook – in a positive way.”

According to the Land Trust Alliance, the national organization that provides a voice for land trusts, bills to make this incentive permanent had 311 House and 28 Senate co-sponsors from 47 states, including majorities of Democrats and Republicans in the House. More than 65 national agricultural, sportsmen’s, and conservation organizations also support this legislation.

To learn more about the enhanced tax incentive call John Eustis at the New River Land Trust, (540) 951-1704 or visit NewRiverLandTrust.org or www.lta.org/easementincentive