Ennis, Montana is in the heart of a very special corner of “the last best place.” One of the means by which this valley has been protected is through conservation easements. A conservation easement is a legal document, developed by a landowner and a land conservation organization that prescribes the uses of a parcel of private property. For landowners, the conservation easement ensures that the management of a treasured piece of land will always be compatible with their vision for the property’s future. Landowners may also receive significant tax benefits, as both state and federal tax laws recognize the gift of a conservation easement as a charitable contribution that serves the public interest of preserving open-space, habitat, and watershed values.
Under federal tax codes, landowners who enter into a conservation easement with a qualified recipient organization - and thus permanently restrict their rights to develop property - have made a charitable donation. The amount of that donation is defined as the difference between the land’s value as potential development property and the land’s value when restricted to the uses allowed under the easement. These values must be determined through a qualified, professional appraisal.
The amount of the donation may then be deducted from the donor’s income for tax purposes. This deduction is generally limited to a maximum of the 30% of the donor’s adjusted gross income in any one year, but any remaining value of the donation may be carried over and applied as a tax deduction for up to five succeeding years.
A conservation easement can also significantly reduce inheritance tax liability; in fact, this is sometimes the major tax consideration for easement donations on large family ranches.
Here in the Madison Valley, over 30% of the private land is under Conservation Easement and will be protected in perpetuity. This insures that the valley will continue to have the wide open space and look pretty much the same in the future.
For more information concerning conservation easements, please contact:
Gallatin Association of REALTORS
Southwest Montana MLS