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A conservation easement is a legal, binding agreement between a landowner and a conservation organization that restricts the development and future use of the land to achieve a conservation objective. Each easement is unique to the parcel it is designed to protect and to the needs of the landowner donating the easement. There are term easements that exist in some states but not Colorado. A conservation easement of the land is binding with the landowners and future owners as well. Landowners who grant easements give up some of their full ownership rights in the property but can be sure that his land will be protected forever. The easement holder is responsible for enforcing the restrictions of the easement. He may be eligible for…show more content…
Federal estate tax deduction and exclusion: Conservation easement limits future uses of land; it also limits the value that can be assigned to property for estate tax purposes. This estate tax “deduction” can lower estate taxes significantly, and can help heirs to keep family land, rather than sell it to pay the estate tax. The federal Taxpayer Relief Act of 1997 created additional estate tax benefits for donors of conservation easements. There is an exclusion from estate tax of up to 40% of the value of land subject to a qualified conservation easement, up to $500,000. A post mortem election whereby the heirs or executor of an estate may grant a conservation easement following the death State property tax benefit: In 1995 the Colorado Legislature passed House Bill 1268, modifying property tax law to encourage land conservation. HB 1268 allows farmers and ranchers who have protected their land from development with a permanent conservation easement to take their land out of production without losing their favorable agricultural property tax classification. The law enables the preservation of precious farm and ranch land by giving farmers and ranchers an option they did not previously have – the option to retire or to suspend an operation due to market, natural, or other conditions. However, there are several issues that the IRS has with
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