Set in a field along eastbound Interstate 80 traveling into Des Moines, Iowa is a set of 4 signs that read accordingly: Urban Sprawl; Ain’t too Pretty; Save Our Farms; Build In The City. The signs make a good point and a worthwhile plea. However, a recent Iowa Farmer Today article pointed out farmers and ranchers can proactively perserve their land for future generations of farming with a conservation easement.
To create a conservation easement, a landowner maintains ownership of the land but transfers the development rights of the property to a land trust. The land trust is operated by a private, nonprofit organization appropriately qualified under the Internal Revenue Code to restrict the development of the land to the terms of the easement; i.e. farming or ranching. The key is that the future landowners are subject to the easement.
As an added benefit farmers and ranchers can also benefit from the tax deduction of conservation easements. Genearlly, a farmer or rancher can expect to deduct up to 30% of the donor’s contribution base, with any remaining amounts deducted up through the next 5 years. A current 2006 tax amendment allowing for 50% – 100% of the charitable contribution and a carryover period of 15 years, ends in 2011. Unfortunately, ongoing budget discussions may curtail an extension of the amendment.
If you are interested in preserving your land for future generations of farmers and ranchers, please contact your attorney to determine whether a conservation easement would benefit you.