This Daily Tax Tip Spotify Podcast and/or WordPress Blog Post understands you are interested in making a contribution of Conservation Property. Special rules apply to such contributions. In order to receive a tax deduction for the contribution, the property contributed must be a qualified real property interest and it must be contributed to a qualified organization to be used only for conservation purposes.
For this purpose, a Qualified Organization is:
(1) A Governmental Unit,
(2) A Publicly Supported Charitable, Religious, Scientific, Literary, Educational, etc., Organization, or
(3) An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a Publicly Supported Charity.
The organization also must have a Commitment to Protect the Conservation Purposes of the donation and must have the resources to enforce the restrictions.
A Qualified Real Property Interest is any of the following:
(1) Your Entire Interest in Real Estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals),
(2) A Remainder Interest, or
(3) A Restriction Granted in Perpetuity on the use that may be made of the real property.
In order to qualify as a Deductible Conservation Contribution, your contribution must be made only for one of the following conservation purposes:
- Preserving Land Areas for Outdoor Recreation by, or for the education of, the general public,
- Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem,
- Preserving open space, including farmland and forest land, if it yields a significant public benefit, or
- Preserving a historically important land area or a certified historic structure.
If a building in a registered historic district is a Certified Historic Structure, a contribution of a qualified real property interest that is an easement or other restriction on the exterior of the building is deductible only if it meets all of the following three conditions:
(1) The restriction must Preserve the Entire Exterior of the Building (including its front, sides, rear, and height) and must prohibit any change to the exterior of the building that is inconsistent with its historical character,
(2) You and the organization receiving the contribution must enter into a Written Agreement certifying, under penalty of perjury, that the organization meets certain requirements, and
(3) You must include with your return a Qualified Appraisal, photographs of the building’s entire exterior, and a description of all restrictions on development of the building, such as zoning laws and restrictive covenants.
If you claimed the Rehabilitation Credit on Form 3468 for the building for any of the five years before the year of the contribution, your deduction is reduced. A filing fee generally applies to qualified conservation contributions over a certain threshold. ,
Please call me at your earliest convenience so we can discuss the Proposed Contribution and collect all the documentation that will be necessary to file with your return.
Please contact the office of Don Fitch Accountancy at (760)567-3110 or Email Don.Fitch@CPA.com if you have any questions or would like additional information.
DON FITCH, CPA
74478 Highway 111 #3
Palm Desert, CA 92260
Toll Free: (877)CPA-Help or (877)272-4357
P.S. My firm is based upon referrals. Please feel free to refer my firm to anyone you know that is looking for a new CPA and/or tax preparer. Thank you in advance.
(Updated 06062021-1 320-660)