HOW THE LAW WORKS
If a landowner makes a gift of land or a conservation easement to a public
or private conservation agency, he/she can use a portion of the value of that
gift as a tax credit to offset the state income taxes that he/she might owe
the Commonwealth of Virginia on his/her other ordinary or capital gain income.
In effect, the landowner can minimize or avoid state income tax liability
by making a gift of conservation land or easement that qualifies under the
statue.
APPLICABILITY AND REQUIREMENTS
Eligible lands must serve agricultural or forestal use, open
space, natural resource, and/or biological diversity conservation, or land,
agricultural, watershed or historic preservation purposes and must be so protected
in perpetuity.
Tax credit can be claimed for an amount equal to 50% of the
fair market value of the gift.
Fair market value must be substantiated by a “qualified appraisal”
as defined under federal laws regarding charitable contributions.
Amount of credit that can be claimed is limited to $50,000 in
FY2000; $75,000 in FY2001; and $100,000 in FY2002 and tax years thereafter.
If there is unused credit value in any one tax year, such excess may be carried
over for a maximum of five consecutive tax years.
Amount of credit used in any one year cannot exceed the amount
of tax due.
Donations must be made to any Virginia governmental body or
a private, non-profit corporation organized as a public charity under U.S.
tax laws and capable of holding interests in land for conservation purposes
in Virginia.
Effective for gifts made after January 1, 2000.
BENEFITS TO THE LANDOWNER
Can reduce or avoid state income tax liability by making a conservation
gift.
Enables landowners to obtain a more attractive financial return
from a gift.
Helps landowners keep their family land.
Encourages private landowners to voluntarily protect important
lands in Virginia.
Benefits landowners in all income categories, not just the wealthy.
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