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One big advantage of buying a home or land with an easement is that it could result in major savings. Conservation land is restrictive by nature, and that's often a big sticking point for buyers. But if you're willing to deal with those restrictions, it could be a good way to buy land or property on the cheap.
Syndicated conservation easement transactions basically involve the use of a pass-through entity (for example, a partnership) to acquire property.
A conservation easement is a legal agreement between a landowner and a nonprofit land trust or governmental entity that permanently limits the uses of the land in order to protect specified conservation values. It does this by restricting the amount of development and activities that can take place in the future.
Conservation easements are legal agreements designed to ensure the long-term viability and protection of the natural resources within the easement boundary. Activities in, or use of, the easement area that is inconsistent with the stated purposes of the conservation easement are prohibited.
Important land is protected, and a fair deduction is taken. The principal reasons for bad conservation easement transactions are incorrect, inflated or fraudulent appraisals that create incorrect, inflated or fraudulent income tax deductions.The public value of conservation easements is tremendous.
Conservation easements are a great idea, in theory. Here's the way they work. Basically, if you are willing to donate your property for the public good, and that donation reduces the value of your property, you get to take a tax deduction equal to the reduction in the value of your property.
When a conservation easement is placed on a property, it typically lowers the property's value for federal estate tax purposes and may decrease estate tax liability. Therefore, easements may help heirs avoid being forced to sell off land to pay estate taxes and enable land to stay in the family.
The value of a conservation easement is determined by a qualified appraiser. The appraiser determines the value of the land before the conservation easement and subtracts the value of the land after the conservation easement to determine at the value of the conservation easement.