Even with the changes in the estate tax laws made in 2001, estate taxes can make it difficult for landowners to pass land on to their children. Heirs may be forced to sell all or part of their land in order to meet their tax obligations. This is because estate taxes owed can represent a significant percentage of the value of the property. An easement can significantly lower estate taxes in two ways: (1) since the easement reduces the value of the property, the estate taxes will be lower; and (2) under the American Farm and Ranch Protection Act, if a landowner donates an easement, his or her heirs can exclude up to 40% of the remaining value of the land from the estate taxes owed.

PEC provided this summary of the tax benefits of conservation easements for informational purposes only. Please consult your attorney and/or accountant for professional advice on the implications of an easement donation for your own tax situation.