Bipartisan Bill Would Permanently Extend Tax Breaks For Donations Of Agricultural Land For Conservation

On February 15, Senate Finance Committee Chairman Max Baucus (D-MT) and Senator Chuck Grassley (R-IA) introduced the “Rural Heritage Conservation Extension Act of 2011,” which would permanently extend income tax relief for ranchers, farmers and other landowners who donate agricultural land for conservation purposes.

“This bill rewards ranchers and farmers in Montana and across the country who want to conserve our land and preserve open space for their kids and grandkids,” said Baucus. “We need to protect our land for future generations and to support the ranchers, farmers and other landowners who rely on it to make a living. These tax incentives provide the right tools to help landowners move toward conservation.”

The bill would permanently extend an increase in the maximum tax deduction for charitable contributions of conservation easements from 30% to 50% of adjusted gross income (AGI) for most taxpayers, and it would also make permanent the provision allowing farmers and ranchers to currently claim a charitable deduction of up to 100% of AGI for their donations of conservation easements, with a 15-year carryover of any excess over the applicable limitation.

In its current form, the increased 50% and 100% deductions provided by Code Sec. 170(b)(1)(E) won't apply to contributions made in tax years beginning after Dec. 31, 2011.