Conservation Easements have been around since 1980 and were introduced for a way to entice and encourage private investors to help preserve land of natural beauty.
Up to that point, private investors really only bought land to buy-and-hold, or to develop. Now, with the introduction of IRS Code 170, private individuals with incomes near or in the highest income tax brackets have a way for some serious tax mitigation.
Conservation Easements are very complex and take a significant time to design to satisfy IRS requirements. Several of the programs we have worked with have gone through and passed an IRS audit. We believe the main reason for this is the programs we offer have gone through independent appraisal and legal reviews.
In understanding Conservation Easements, here are some highlights:
Approximately, for every $1 invested, a $4-5 tax deduction is received; although, this varies from program to program.
The minimum investment is approximately $25,000.
For very large investments (or more conservative investors), a Lloyd’s insurance policy can be bought to insure against a potential unfavorable IRS ruling.
Several, but certainly not all programs, have been audited by IRS and passed those audits.
Deduction limits are up to 50% of Adjusted Gross Income (AGI).
Conservation Easement investments are not subject to Alternative Minimum Tax (AMT).
If all the deduction is not used, it can be carried forward for up to 15 years.
We like to work with real numbers which is why we always insist our clients’ CPAs or tax attorneys get involved to determine if this strategy is right for them. If you would like more information We would be happy to discuss further and provide a Private Placement Memorandum (PPM) as well.
To learn more, please contact me directly at firstname.lastname@example.org or 925-930-3970.
This is a very complex real estate investment strategy and you should consult with your CPA or tax attorney to see if this strategy could be right for you. Also, this article and video is not meant to fully educate you about Conservation Easements as related to IRS Code 170(h), but meant as a brief overview of how a strategy like this could possible benefit you. Finally, we believe this information to be correct as of the date of release.
Registered Representative. Securities offered through Whitehall-Parker Securities, Inc., a broker-dealer, Member FINRA/SIPC. 477 Pacific Avenue, 2nd Floor, San Francisco, CA 94133. Whitehall-Parker Securities, Inc. and Frontier Wealth Strategies Inc. are not affiliated.