Land trusts race against time

SOUTH COVENTRY � Things are bustling at the French & Pickering Creeks Conservation Trust offices these days, and not in anticipation of Christmas. The trust is hustling to get all its clients� conservation easements recorded before the end of the year.

�I just found out that the Recorder of Deeds office is closing at 3 p.m. Dec. 31, so that�s where I�ll probably be celebrating New Year�s Eve,� said Pam Brown, conservation director at the trust.

This has been a record year for the trust, with more property owners putting conservation easements on their land in 2007 than in all the last 10 years combined.

And it�s not just French & Pickering; other land trusts are reporting the same situation.

Andrew Johnson, president of North American Land Trust, said it�s hard to get a decent night�s sleep during the last three weeks of December.

�This morning I slept in and got here at 5:30 a.m. Usually I come in at 4:30 a.m. My kids know not to come home for Christmas. They usually come in January,� said Johnson.

This year the trust has 48 easements in nine states to prepare and record before year�s end. That represents 150 advisers � attorneys and accountants hired by property owners who are e-mailing and calling North American Land Trust to iron out details of each easement, said Johnson.

It�s a time-consuming process. And if a property owner is getting a grant from the state or county, the easement must be reviewed by the state or county. Once the document is complete, the property owner goes through a closing with the trust, then the trust records the deed. It is important to ensure the document is correct because once recorded, it cannot easily be amended. The easement permanently protects the land from development even if the property is sold.

The push to get the easements recorded by year�s end is so the property owners, if eligible, can make deductions on their 2007 taxes.

When property owners secure conservation easements on their land, they are basically giving up their development rights. Many property owners donate the easement to a trust. Once a conservation easement exists, the value of the property diminishes. The difference between what the property was worth before the conservation easement and what it is worth after is known as the development rights.

Another reason trusts are in a hurry to get easements recorded by the end of the year is because a law that allowed expanded tax benefits on eligible donated easements expires Dec. 31.

Congress passed the law that expanded tax incentives for conservation easements in August 2006. The new rule allows individuals to deduct 50 percent of their adjusted gross income against the value of the easement, compared to a previous limit of 30 percent. The law also allows a 15-year carryover period, compared to the previous five-year carryover limit after the first year.

For example, if a property owner donates a conservation easement that is valued at $500,000 and has an adjusted gross income of $100,000, in the first year, $50,000 of the income can be deducted.

If the adjusted gross income remained at $100,000, and the individual deducts $50,000 every year, it would take 10 years to exhaust the total value of the easement.

Under the former law, the individual would get a $30,000 deduction the first year, but since it could only be carried forward for five years, the total value would only be $180,000 and $320,000 of the value of the easement would be lost.

With this law set to expire at the end of the month, trusts around the country have been working to get the expanded benefits made permanent.

To contact staff writer Anne Pickering, send an e-mail to apickering@dailylocal.com.