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Land Preservation Tax Credit
State of Virginia
To protect the state’s unique natural and historical resources by rewarding and assisting habitat stewardship by private landowners.
Who Can Participate
Tax-payers who donated a conservation easement after January 1, 2000. This tax credit applies to any person, corporation, partnership, organization, trust or estate subject to state or local taxation.
How it Works
Virginia allows an income tax credit for 40 percent of the value of donated land or conservation easements. For tax years 2002 through 2008, taxpayers may use up to $100,000 per year for the year of sale and the ten subsequent tax years. For tax years 2009 through 2011, taxpayers may use up to $50,000 per year for the year of the sale, and then 13 subsequent tax years for taxpayers affected by the credit reduction for those years. Unused credits may be sold, allowing individuals with little or no Virginia income tax burden to take advantage of this benefit. The credit is worth 40% of the easement’s fair market value, up to $100,000 per year. If the credit is not used up in the year of the easement donation, it can be carried forward for an additional five years. Furthermore, if the easement was donated after 2001, the credit may be sold or transferred to other Virginia taxpayers. Individuals and corporations in the state of Virginia may buy or sell conservation tax credits, as long as a notification of the transfer of the credit is sent to the tax commissioner. For 2009 and 2010, the Legislature reduced the cap from $100k to $50k, but since the credits are transferable a donor should still be able to claim full credit.
To be eligible for tax credits, the easement must qualify as a charitable deduction under the IRS Code and meet additional requirements under the Virginia Land Conservation Incentives Act. DCR is responsible for verifying the conservation value of Land Preservation Tax Credits for all donations of land or conservation easements for which the donor claims a state tax credit of $1 million or more. These applicants must meet the Conservation Value Review Criteria adopted by the Virginia Land Conservation Foundation Board.
How to Get More Information
Contact Jeremy Stone
Visit the VA DCR webpage on the Land Preservation Tax Credit