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Conservation Easements Conservation Easements with the Cibolo with the Cibolo Conservancy Conservancy

Cibolo Conservancy Easements

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Page 1: Cibolo Conservancy Easements

Conservation Easements Conservation Easements with the Cibolo with the Cibolo

ConservancyConservancy

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DefinitionDefinition

A conservation easement is a A conservation easement is a legal document which contains legal document which contains permanent restrictions on the permanent restrictions on the use or development of the use or development of the land.land.

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The purpose of a conservation easement

To provide a proven tool for land owners who want to personally define and put in place permanent restrictions for:

The protection of wildlife habitat

The protection of open space

The preservation of agricultural lands.

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Why consider a Why consider a conservation easement?conservation easement?

1. Preserve natural heritage 1. Preserve natural heritage for future generations.for future generations.

2. Prevent heirs or subsequent 2. Prevent heirs or subsequent third parties from third parties from “ranchetting” family land.“ranchetting” family land.

3. Continue existing uses for 3. Continue existing uses for agricultural & recreational agricultural & recreational purposes.purposes.

4. Maintain limited residential 4. Maintain limited residential uses with reserved building uses with reserved building sites.sites.

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Tax Advantages

1.1. Income tax benefits.Income tax benefits.

2.2. Estate tax benefits.Estate tax benefits.

3.3. Gift tax benefits.Gift tax benefits.

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How is a conservation How is a conservation easement valued?easement valued?

An independent appraiser sets the value by determining the difference in the values of the property before and after it would be encumbered by a conservation easement.

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Federal Income Tax

Can deduct the value of the easement as a charitable gift, up to 50% of your Adjusted Gross Income each year, for 16 years, until the value of the gift is used up. (Up from 30% for 6 years).

Individuals or corporations can deduct up to 100% of AGI if the majority of that income came from farming, ranching or forestry.

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Estate Tax Benefits

The value of the donated easement can be deducted from the taxable value of the estate.

An additional 40% of the land’s restricted value can be excluded, up to $500,000, if the easement meets certain conditions under IRC 203(c).

After the death of the landowner, the estate may donate an easement and obtain an estate tax deduction for the value of the easement.

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Gift Tax Benefits

Gifts of property during a property owner’s lifetime can reduce or eliminate gift taxes.

Deductible annual gifts are limited, up to a lifetime total of $1,000,000, without incurring gifts taxes.

A conservation easement donation made before the gift reduces the value of the property, and the amount of gift tax.

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A local land trust is a private non-A local land trust is a private non-profit organization, whose board of profit organization, whose board of directors are members of the directors are members of the community in which the trust community in which the trust operates. The land trust is the operates. The land trust is the recipient of a conservation recipient of a conservation easement.easement.

A land trust has the responsibility for A land trust has the responsibility for enforcing development restrictions enforcing development restrictions contained in a conservation contained in a conservation easement. Representatives of a land easement. Representatives of a land trust annually inspect the property.trust annually inspect the property.

What is a local land trust?What is a local land trust?

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No.

Is public access required?

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Will this prohibit all Will this prohibit all development?development?

No. The landowner can No. The landowner can reserve rights to have reserve rights to have additional homesites, to additional homesites, to use for agricultural use for agricultural purposes, hunting, purposes, hunting, fishing, or recreation.fishing, or recreation.

However, the landowner However, the landowner must sufficiently protect must sufficiently protect the conservation values.the conservation values.

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Ownership Questions

Can I sell the property or transfer ownership? YES.

Will the land trust own the property? NO, the land trust only holds the easement and protects the restrictions you place on the property.

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Do land trusts expect an endowment?

Yes. The land trust is Yes. The land trust is assuming the assuming the responsibility for responsibility for enforcing your legacy enforcing your legacy in perpetuity. Land in perpetuity. Land trusts need to meet trusts need to meet expenses and build a expenses and build a legal defense fund. legal defense fund.

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What are the first What are the first steps?steps?

Contact family attorney, Contact family attorney, estate planner, or estate planner, or accountant.accountant.

Meet with local land trust.Meet with local land trust.

Survey property.Survey property.

Environmental assessment.Environmental assessment.

Draft a plan of restrictions Draft a plan of restrictions and reserved rights.and reserved rights.

Talk with family.Talk with family.

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Next StepsNext Steps

Letter of intent signed by Letter of intent signed by all property owners and all property owners and land trust.land trust.

AppraisalAppraisal

Approval by land trust Approval by land trust Board of DirectorsBoard of Directors

Sign ContractSign Contract

File at Court HouseFile at Court House

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Founded in 1998 as a sister Founded in 1998 as a sister organization to the organization to the Cibolo Nature Center.Cibolo Nature Center.

Holds 11 easements, Holds 11 easements, totaling over 4 square totaling over 4 square miles of the Texas Hill miles of the Texas Hill Country.Country.

Member of the Land Trust Member of the Land Trust Alliance.Alliance.

The Cibolo Conservancy

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Contact the Cibolo ConservancyContact the Cibolo Conservancy

Phone: (210) 601-4599Phone: (210) 601-4599

Address: 25 Spring Creek Road Address: 25 Spring Creek Road Boerne, TX 78006Boerne, TX 78006

Email: Email: [email protected]

Visit: The Cibolo Nature Center in Visit: The Cibolo Nature Center in Boerne City ParkBoerne City Park

More Questions?