SCHUMER LAUNCHES PUSH TO MAKE TAX BENEFIT THAT PRESERVES UPPER HUDSON VALLEY’S PRISTINE FARM LANDS PERMANENT – WILL HELP MAINTAIN CHARACTER OF COLUMBIA COUNTY & KEEP FAMILY FARMS ALIVE BY PROVIDING SIGNIFICANT INCENTIVE FOR LANDOWNERS TO CONSERVE LAND INSTEAD OF DEVELOPING IT
In Columbia County, Conservation Tax Benefit Has Helped Preserve 5,500 Acres of Land From Development; Makes Preserving Farmland More Attractive – Tax Benefit Has Only Been Extended One Year, Leaving Many Local Landowners Uncertain Whether It Will Exist Long-Term & Unable To Take Advantage
Schumer Pushes To Make Important Deduction Permanent in Next Congress; Schumer Bill Could Allow Some Farmers To Potentially Zero Out Taxes Over 16 Years – Conservation Projects Around NYS Have Almost Doubled With This Tax Benefit In Place; Schumer Says Benefit Should Be Permanent & Not Subject to Whim of Congress
Schumer: Fed Government Should Provide Increased Incentive For Conservation Projects in Columbia County & Around NYS
Today, at the Columbia Land Conservancy in Chatham, U.S. Senator Charles E. Schumer launched his push to make a tax benefit permanent that helps preserve the beauty and character of the Upper Hudson Valley and helps keep family farms alive. Schumer explained that there is a tax benefit, called the enhanced conservation easement tax deduction, which allows family farmers, ranchers, and forest land owners to receive significant tax benefits for foregoing development rights on their land and donating it for conservation easement instead. Specifically, this tax benefit enables landowners to deduct 50 percent of their adjusted gross income in any given year, and even enables certain farmers to deduct 100 percent, meaning they could zero out their federal income taxes. However, this benefit is not permanent – in fact, it expires in 2015 – and is subject to the whim of Congress to reauthorize each year. Schumer said that landowners need certainty that this tax benefit, which has helped preserve 5,500 acres in Columbia County, will exist over the long-term for it to be effective and he launched his push to make the deduction permanent in the next Congress. Schumer said that multiple landowners in Columbia County are interested in preserving land and taking advantage of this tax deduction, but need to know that the tax benefit will always be there.
“Pristine farmland is important to the Upper Hudson Valley’s economy and is an intrinsic part of the region’s culture and heritage. Currently, there are landowners across the region who want to donate portions of their land for conservation, instead of allowing it to be developed, but each year Congress threatens to cut off a lucrative benefit that makes the land donation financially attractive,” said Schumer. “That is why, in this upcoming Congress, I will focus my efforts on making the enhanced conservation easement tax deduction permanent. This deduction gives Hudson Valley landowners an increased incentive to preserve the beauty and character of the region and it helps them save money while protecting the land we value so dearly.”
Schumer explained that there is currently a tax benefit, called the enhanced conservation easement tax deduction, which allows family farmers, ranchers, and forest land owners to receive significant tax benefits for foregoing development rights on their land and donating it for conservation easement instead. A conservation easement is a legal agreement between a landowner and a land trust or government that, for conservation purposes, permanently limits the use of the land, so that most new structures cannot be built on the land, while farming, ranching and land stewardship can continue. A landowner usually donates the easement to a land trust or government, and in turn, the landowner can then receive a tax deduction on this conservation easement donation.
This tax deduction for conservation easement donations was enhanced in recent years, but expired in 2013. Just this month, Congress reinstated the deduction, however this benefit was only reinstated on a retroactive basis through 2014. Schumer said that, because this benefit is not permanent, it is subject to the whim of Congress to reauthorize each year. Schumer said this deduction is too important to be left to chance each year and, as a result, he will be pushing his colleagues in the next Congress to make the deduction permanent. Schumer explained that the enhanced conservation easement tax deduction was put into place in 2006 and provided a significant tax benefit to landowners, and especially to farmers and ranchers who chose to forego development rights and instead protect natural resources in Upstate New York and the Upper Hudson Valley. Schumer said that many landowners in Columbia County are currently interested in donating a portion of their land for conservation rather than development, but the enhanced conservation easement tax deduction must be reinstated on a permanent basis in order to make land protection more attractive in the long-term.
Specifically, this tax benefit enables landowners to deduct 50 percent of their adjusted gross income in any given year, and even enables certain farmers to deduct 100 percent of their adjusted gross income, meaning they could zero out their federal income taxes. Schumer said that a total of 5,500 acres have been protected in Columbia County as a result of the incentive – and thousands more throughout the Upper Hudson Valley – but more landowners would use it if it were not left to the whim of Congress each year. Schumer’s proposal would permanently extend the maximum cap on deductions a donor can take for donating a conservation easement in any year to 50 percent of their adjusted gross income. Qualified farmers and ranchers could deduct 100 percent of their adjusted gross income, meaning they could zero out their taxes federal income taxes. It would also increase the number of years over which a donor can carry-forward their deductions from six years to 16 years.
Schumer explained that, under his proposal, a landowner earning $50,000 a year who donated a $1 million conservation easement could deduct $25,000 (50%) for the year the donation is made and then for an additional 15 years. This same landowner then has the potential to receive $400,000 in deductions over 16 years. Furthermore, if the landowner qualifies as a farmer or rancher, they can also zero out their taxes by deducting up to 100 percent of their adjusted gross income. In that case, they could take a maximum of $800,000 in deductions for their million dollar gift. This means this farmer or rancher could deduct $50,000 per year, and zero out their entire adjusted gross income subject to federal taxes for 16 years.
The enhanced easement incentive has effectively doubled conservation projects around New York State. According to the Land Trust Alliance, it has protected 35 parcels totaling 5,500 acres in Columbia County alone during the years the enhanced incentive was in place from 2006 to 2013. The alliance also reports having two current property owners would like to protect their land but will not if the incentive is not in place. Nationally, the Land Trust Alliance has also estimated that this tax incentive put into place at the higher 50 percent rate in 2006 is directly responsible for conserving more than 2 million acres across the country.
According to the Land Trust Alliance, America loses three acres of land to developers every minute and a total of 1.5 million acres every year. Schumer said that farmers should have the choice to preserve the land that has been in their families for generations rather than simply sell it to real estate developers. These conservation easements are a way for landowners to exchange their development rights, which is often a farm or ranch’s most valuable asset, for a significant tax deduction that allows the land to be kept in its natural state. Lands placed into easements can continue to be farmed, grazed, hunted on or used for outdoor recreation and wildlife conservation. Schumer said that without a permanent conservation deduction in place, landowners of modest income may feel financial pressure to sell their valuable assets, like their farms, ranches, and forest lands to developers. Schumer said this would threaten the very heritage and culture of rural communities in Upstate New York and the Hudson Valley.
Schumer was joined by Peter Paden, Executive Director of Columbia Land Conservancy; Karen Ross, a landowner in New Lebanon, NY who is taking advantage of the deduction; Andy Bicking, Scenic Hudson Land Trust; and Ethan Winter of the Land Trust Alliance.
“Conservation easement donations by landowners across the country increased by a third, to one million acres a year, since the enhanced federal incentive first passed in 2006. We applaud Senator Schumer for stepping up for all New Yorkers by supporting the Rural Heritage Conservation Act, which makes the incentive permanent,” said Rand Wentworth, president of the Land Trust Alliance. “With this smart, bipartisan policy, farmers, ranchers and private forest owners can afford to make a critical choice - to preserve their working lands and to protect our natural heritage for future generations. It’s a true win-win solution. We greatly appreciate Senator Schumer’s leadership, and we are committed to doing everything we can to get this bill over the finish line.”
“I own a property in Columbia County with a great deal of conservation value, and would very much like to permanently protect it,” said Josephine Lea Iselin, a New York resident and owner of a 180 acre farm in the Town of Ghent. “However, without the enlarged deduction rules, the financial benefit to me from doing so will be minimal; thus I do not feel that I can afford to make the gift if the more liberal deduction rules are not enacted.”
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