On December 29, 2022, Congress passed the Charitable Conservation Easement Program Integrity Act as part of the year-end omnibus spending bill. The Act puts an end to abusive, syndicated conservation easement transactions that have cost taxpayers and tarnished the reputation of the conservation tax incentive and the land conservation community.  

For landowners who hold important historic, natural, and agricultural property, a conservation easement is a practical way to meet land preservation goals while gaining eligibility to certain tax deductions. The state of Colorado also offers a generous tax credit for conservation easements. Most of these donations are genuine endeavors for important land protection, however some have misused this deduction by obtaining artificially inflated land appraisals.

The Act aims to close loopholes in conservation easement donations and shut down this tax avoidance scheme. A key provision of the Act provides:

1. A contribution by a partnership shall not be treated as a qualified conservation contribution for purposes of this section if the amount of such contribution exceeds 2.5 times the sum of each partner’s relevant basis in such partnership unless:
   1. The contribution meets a 3-year holding period test or
   2. The contributing partnership is owned by members of a family

For more information on conservation easements and how to preserve your land, please contact Bill Silberstein or Heather Haney.