The Act and Conservation Easements

The Tax Relief Extension Act of 2015 (The Act) that passed Congress and was signed by the President last week contains numerous provisions that affect you and your clients.  More on all of that shortly.  The part of the act that has a major impact to high income earners relates to the donation of conservation easements to a qualified organization.

Under the Code, the amount of the deduction was 30% of adjusted gross income (AGI) with a carry-forward of unused deductions of five years.  Since 2006, the amount of the deduction had been increased to 50% of AGI and the carry-forward had been increased to 15 years annually, with what was referred to as “tax extenders.”

The Act makes the change to 50% of AGI with a 15 year carry-forward permanent, retroactive to January 1, 2015.  If someone made an investment with the 30% of AGI limitation, they could increase this to 50% of AGI.  To qualify for 2015 tax treatment, this investment has to be made by December 31, 2015.  If this applies to you or your clients, the time to act is now.