Conservation Options

About Conservation Easements

A conservation easement is the use of a private property right to create a voluntary, permanent agreement between a landowner and a land trust to protect certain natural features such as:

clean water • working farms and ranches • wildlife habitat • scenic views and open space

The Bitter Root Land Trust works with local landowners to ensure the conservation easement is tailored to protect the specific natural values of each property and meet the financial and personal needs of the landowner. For example, an easement on land containing wildlife habitat might limit development while an easement on a working farm may allow farming and the building of additional agricultural structures.

When a landowner partners with the Bitter Root Land Trust to create a conservation easement, the Land Trust takes on the responsibility and legal right to monitor and enforce the easement. The conservation easement is a recorded deed that is part of the title to the land, so all future owners are bound by the terms of the conservation easement.
The Bitter Root Land Trust works with current and future landowners to ensure the vision put forth in the conservation easement is adhered to in perpetuity.

Conservation easements may be purchased or donated. In some cases, landowners may be able to partner with the Bitter Root Land Trust to apply to the Ravalli County Open Lands Program or other granting entities for funding to cover the transaction costs or to be compensated for some percentage of the value of the development rights he/she has voluntarily extinguished.

Income Tax Benefits


In December of 2015, Congress made permanent a federal tax incentive for conservation easement donations that can help thousands of landowner conserve...READ MORE

Donated easements can provide estate and income tax deductions. If a donated conservation easement meets federal tax code requirements, the value of the easement can be treated as a charitable gift and deducted from federal income tax following the IRS guidelines for a "qualified conservation contribution." In general, for property amounts (rather than cash), up to 30% of the taxpayer's adjusted gross income is deductible each year for six years. Thus the maximum total value allowed to be deducted is 30% of adjusted annual gross income times six. Any value that remains after the sixth year is lost for deduction purposes. The accepted value of the donated easement is the value of the land without the easement minus the value of the land with the easement (i.e. it is the opportunity cost to the donor of giving up the development rights).
Section 170(h) of the Federal Internal Revenue Code defines "Qualified Conservation Contributions." This part of the tax code indicates the conditions necessary for a conservation easement to qualify for deduction as a charitable contribution. In general, the contribution must be of a qualified real property interest to a qualified organization exclusively for conservation purposes. Specifically, the easement must meet several criteria:
1. Be "an easement or other interest in real property that under state law has attributes similar to an easement." The donor can and does retain any rights to use his/her land, such as to sell it, give it away, or transfer ownership. He/She also can continue to live on the property, reserve the right to develop some excludable portion of the property or keep subsurface mineral rights.
2. Be donated to a "qualified conservation organization." This includes charitable conservation organizations or governmental units, but not private foundations.
3. Be "for conservation purposes".
4. Be enforceable in perpetuity.
5. Have an agreement by the mortgage company that the easement remains in effect with any sale of the property, even if foreclosed.
6. Have "documentation sufficient to establish the condition of the property at the time of the gift."
Landowners should consult with an attorney experienced in this area and with their financial advisors or accountants to determine if they would benefit from granting a conservation easement. The legal transfer of the easement must be written very carefully so that the landowner's wishes are carried out and so that the maximum tax benefits are obtained.

Suggested References

Diehl, Janet, and Thomas S. Barrett. 1988. The Conservation Easement Handbook. Land Trust Exchange and the Trust for Public Land. San Francisco and Alexandria.
Small, Stephen J. 1986. The Federal Tax Law of Conservation Easements. Land Trust Exchange. Alexandria, VA.
Small, Stephen J. 1988. Preserving Family Lands. Land Trust Exchange et al. P.O. Box 2242, Boston, Massachusetts 02107.