For just the second time since President Bush took office, Congress has overridden a presidential veto and enacted the 2008 Farm Bill.
While there is clearly great debate about specific elements of this new law, most everyone agrees that we need to protect and value our vanishing farm, forest and ranchlands. Toward that end, this law provides significant conservation programs. These include: increased or extended funding for the Farm and Ranchland Protection Program, the Environmental Quality Incentives Program, the Conservation Stewardship Program, the Wetland Reserve Program and the Grassland Reserve Program along with a new conservation loan program and a significant expansion of the tax benefits for private land protection through qualified conservation easements.
Each of these conservation programs offers benefits to certain landowners. As a local and regional land trust, the Southern Oregon Land Conservancy views the expansion of conservation easement tax benefits as a wonderful, and time limited, opportunity for private landowners to benefit financially while also helping preserve our region's quality of life for future generations. Additionally, these conservation easement benefits can all be achieved by keeping the land in private ownership"o but protected forever.
For years landowners have been taking advantage of the federal income and estate tax benefits of donating conservation easements on their private land. The Southern Oregon Land Conservancy alone protects over 8,000 acres of land in Southern Oregon through conservation easements. Recently the Land Trust Alliance, a national organization that sets standards for conservation organizations, provides training and networking opportunities and represents the land trust community in Washington, D.C., along with many individual land trusts and landowners, have pushed for an expansion of the federal tax benefits. This hard work has been rewarded in the 2008 Farm Bill's provisions enhancing the tax deduction available for conservation easements.
Practically speaking, this means that all qualified conservation easement donations made before the end of 2009 may be deducted against up to 50 percent of the taxpayer's Adjusted Gross Income. This is an increase from the previous limit of 30 percent. Additionally, any remaining value may be carried forward over 15 years instead of the five years currently allowed.
Furthermore, for those who make more than half of their income from farming, ranching or forestry, the deduction limit is increased to 100 percent of their AGI with the same 15-year carry-forward. This two-year extension of the same benefit that expired in December of 2007 allows more farmers, ranchers and other landowners to utilize the full tax benefits of a donated easement.
While there are specific provisions for farms, forest and ranch lands, these benefits apply to all lands protected through qualified conservation easements that are donated to a qualified conservation organization. The increased deductibility even applies to those corporate farmers and ranchers who meet the law's qualifications.
In the past, many landowners, especially farmers and ranchers, have been unable to fully utilize the value of their conservation easement donation. For many landowners the value of their donation has exceeded their ability to utilize its full benefit when limited to 30 percent of their AGI over six years. With the expansion of the deduction to 50 percent, or even 100 percent, of their AGI over 16 years many more people will realize the full tax benefits of a conservation easement donation.
This provision allows private landowners to protect the land they love forever while maintaining it as private land and fully benefiting from their generosity through the tax deduction. It also benefits those of us who live in Southern Oregon and value our important rural lands for their natural beauty, wildlife habitat and scenic vistas.
For 30 years the Southern Oregon Land Conservancy has been helping private landowners protect special lands in our region. Now we all have an opportunity to do even more. The 2008 Farm Bill enhances the benefit for landowner who seek to protect their lands, but only if they act before Dec. 31, 2009. For more information about these tax benefits, contact the Southern Oregon Land Conservancy at 541-482-3069, see our Web site at landconserve.org or see the Land Trust Alliance's Web site at LTA.org.
Alex Liston Dykema is staff attorney for the Southern Oregon Land Conservancy.