In a joint venture with DESE, Research in Huntsville, the Alabama Waterfowl Association through a conservation easement just conserved 20 more acres that adjoin AWA�s Phillips Wildlife Demonstration Area. The Phillips WDA is a cooperative project with TVA, to restore water quality, wetland restoration and preserve wildlife habitat. AWA with the joint venture with DESE, Research and the Phillips WDA will conserve a hundred acre block that will connect the Mud Creek Wildlife Management Area with the Skyline Martin Wildlife Management Area. This will create a contiguous greenway that will encompass nearly 80,000 acres that runs from south of the Tennessee River to north of the Tennessee State Line including the Tennessee Wildlife Resource Agency�s Carter Wildlife Management Area.
AWA would certainly like to thank Mr. Wallace Kirkpatrick, CEO of DESE, Research and Mr. J. D. and Mrs. Elizabeth Phillips for working with AWA on this land preservation acquisition. DESE, Research will keep all hunting and recreation rights, however is signing a conservation easement with AWA to not develop any buildings on this site and manage to complement AWA�s Phillips WDA management practices.
AWA will complete the restoration work and a physically challenged waterfowl hunting blind at the Phillips WDA this fall. AWA will sponsor youth and physically challenged waterfowl hunts to be announced soon.
For more information contact: Jerry Davis
ALABAMA WATERFOWL ASSOCIATION, INC. (AWA) TM
1346 COUNTY ROAD #11
SCOTTSBORO, ALABAMA 35768 PHONE and FAX (205) 259-2509
[email protected]http://www.alabamawaterfowl.org
Physically Challenge blind under construction
Physically challenged signage at Phillips WDA
What are Conservation Easements?
Conservation easements are restrictions that landowners voluntarily place on their property that legally bind the actions of present and future owners of the property. Property ownership includes certain privileges that allow a landowner to exercise certain property rights (for example, the right to mine, develop or subdivide a property.) A conservation easement restricts the landowner's ability to exercise some of these rights. The rights given up and those retained by the owner are set forth in a legal document (the conservation easement) which is then transferred to a qualified organization, such as Alabama Waterfowl Association.
Each conservation easement must be specifically designed for a particular property, tailored to protect the unique natural features and flora and fauna of the property. The specific rights retained by the landowner or restricted by an easement vary with each property. General provisions of the conservation easement may include: preserving open spaces, natural water sources, traditional land uses, timber management, and wildlife habitat, and/or permitting one or two cabin sites for the buyer, but no further subdivision or development.
Tax Benefits of Conservation Easements
Income Tax Benefits
If a conservation easement meets certain criteria, the donor may generally deduct the value of the conservation easement from his or her adjusted income, provided that the deduction does not exceed 30 percent of his or her adjusted gross income in the year of the gift. Any excess balance of the deduction may be carried over for up to five succeeding years, subject to the same annual 30 percent limitation.
Property Tax Benefits
Some state tax codes direct local tax assessors to consider the restrictions imposed by a conservation easement. This provision generally lowers property taxes on restricted parcels if the land is not already enrolled in a differential assessment program. Differential assessment programs direct local tax assessors to assess land at its value for agriculture or forestry, rather than its "highest and best" use, which is generally for residential, commercial, or industrial development.
Estate Tax Benefits
The donation or sale of a conservation easement usually reduces the value of land for estate tax purposes. To the extent that the restricted value is lower than fair market value, the estate will be subject to a lower tax. In some cases, an easement can reduce the value of an estate below the level that is taxable, effectively eliminating any estate tax liability.
Recent changes to federal estate tax law, enacted as part of the Taxpayer Relief Act of 1997, provide an additional incentive for landowners to grant conservation easements. Executors can elect to exclude 40 percent of the value of land subject to a donated qualified conservation easement from the taxable estate. This exclusion will be phased in over a five-year period. In 1998, landowners could exclude up to $100,000 under the provision, which will increase to a maximum of $500,000 in 2002. The full benefit offered by the new law is available for easements that reduce the fair market value of a property by at least 30 percent. Smaller deductions are available for easements that reduce property value by less than 30 percent.
The value of a conservation easement must be based upon an appraisal for tax purposes. While it is often difficult to appraise, the value of an easement is generally the difference between the value of the land unrestricted and the value of the land with perpetual conservation restrictions in place. For example, if a tract of land is valued at $50,000 without restrictions and at $20,000 after the conservation easement has been given, the value of the conservation easement (and the amount of the tax deduction) is $30,000.
(CAUTION: Each parcel of land and each conservation easement is unique, and there can be no set or average percentage of value attributed to the rights relinquished. Each situation will be different.)
The conservation easement is an instrument that can be used to preserve and protect natural scenic beauty and natural resources while offering distinct tax advantages for the new landowner.