Tax Benefits header

Tax Benefits

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.

***Federal Tax Law Changes

Changes to the tax laws in 2018 have effected federal deductibility of donations when used in conjunction with the Iowa Conservation Tax Credit. The new federal rules require the federal deduction be reduced by the amount claimed for a state tax credit. As an example, a gift value of $200,000, would result in $100,000 state tax credit and qualify for $100,000 in federal tax deductions. And for another example, a gift value of $300,000 would result in $100,000 state tax credit (capped at $100,000) and $200,000 in federal deduction. There are additional nuisances that may be applicable depending on the gift and so donors are HIGHLY encouraged to discuss the tax impact with their tax preparer.

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.

Lots to think about. Let’s talk it through.
It can be hard to sort through your land protection options and tax benefits on a website. We’re here to help you through it. We can visit by phone, in person or on the land. Free. Confidential. No sales pitch. No obligation. Just the information and introductions you need to get started. Contact us.

Iowa Natural Heritage Foundation does not provide professional tax or legal advice. We encourage you to hire professional advice as needed to assist your transaction and your deduction.