Federal and state tax laws reward conservation donors who protect public values like clean water, scenic views and wildlife habitat. This makes land protection surprisingly affordable. When a donation of land or a conservation easement provides permanent conservation benefits, the donation may be considered for generous and unique income tax benefits.
Iowa income tax credit
If you have Iowa income and are protecting land in Iowa, the Iowa Charitable Conservation Contribution Tax Credit may benefit you. You may be able to receive a tax credit of:
- Up to 50% of the fair market value of the real property interest that you donate, up to a maximum $100,000 tax credit per donation, plus
- a “carry-forward” of up to 20 years to help you receive your full tax credit even if your income is relatively low.
Federal income tax deduction for land donations
The value of your donation of land may be claimed as a qualified charitable contribution. This applies to various kinds of land donation, including:
Federal income tax deduction for conservation easements
Landowners who permanently protect private land with a conservation easement may deduct the value of your donation with broader terms:
- Deducting up to 50 percent of the donor’s annual adjusted gross income (compared to 30% for most charitable gifts) — or for qualifying farmers and ranchers, up to 100 percent of income
- A “carry-forward” of up to 15 years
More about conservation easement deductions.
Talk with your adviser
A conversation with your tax adviser can help you make the most of tax benefits available to you. Talk with your tax adviser about issues like:
- How to time your gift for maximum financial advantage
- How to compare the tax benefits of other options vs. making a bequest of land. (Bequests offer great flexibility, but they provide no tax benefits during your lifetime.)
- How tax benefits can make a land donation or bargain sale more affordable. For example, landowners often discover that donating significant land value as part of a conservation sale can yield the same bottom-line return as a full-value sale.
Tax laws are complex and constantly changing. Always get professional advice when considering your options.
Determining your donated value and handling the filing accurately are key to receiving tax benefits.