Summary
IRC section 2031(c
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Extract
Land preservation provides estate tax benefits: section 2031(c).
I.
INTRODUCTION In 1997, Congress created new estate tax benefits for landowners(1) who preserve land with a conservation easement. The new benefits allow for as much as a $500,000 exclusion from estate taxes. While private citizens and their beneficiaries will benefit from reduced estate taxes, the public stands to benefit the most from the new tax provision, because it provides incentive to preserve land for future generations. The 1997 Taxpayer Relief Act(2) added Section 2031(c)(3) to the Internal Revenue Code ("I.R.C."), providing for an estate tax exclusion for landowners who preserve their land with a conservation easement. A "conservation easement is a legal agreement a property owner makes to restrict the type and amount of development that may take place on his or her property. Each easement's restrictions are tailored to the particular property and to the interests of the individual owner."(4) This article first briefly provides an overview of conservation easements and their previous tax treatment. The article then focuses on a new section of the tax code, I.R.C. [sections] 2031(c), its requirements and its administration. II. CONSERVATION EASEMENT OVERVIEW "Conservation easements are private land use restrictions designed to preserve open space and other environmentally significant resources."(5) Land preservation occurs when landowners voluntarily agree to place restrictions on their land, in the form of conservation easements. Such conservation easements are then donated to a governmental agency, foundation, or I.R.C. [sections] 501(c)(3) organization.(6) Once a landowner donates the right to use the land in a certain mann...See the full content of this document
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