In a previous post, we noted that the Colorado Department of Revenue (CDOR) was considering revisions to conservation easement tax credit regulations, and on March 17, 2021, those revisions were adopted. Rule 39-22-104(3)(g), Rule 39-22-304(2)(f) and Rule 39-22-522 will become effective on April 30, 2021. As a reminder, the amendments are intended to conform the regulations to House Bill 19-1264 signed into law on June 3, 2019, which included a number of substantive revisions to the conservation easement enabling statute (C.R.S. § 38-30.5-101, et seq.) and the conservation easement tax credit program in Colorado. Continue Reading Colorado Department of Revenue Adopts Revised Conservation Easement Tax Credit Regulations
Bloomberg reported today about the criminal prosecutions of two promoters of syndicated conservation easements. The article details the guilty pleas of two brothers, Stein Agee and Corey Agee, to federal tax-fraud conspiracy charges. Their scheme involved classic syndication collaboration with lawyers, accountants and appraisers to sell shares in entities donating conservations easements and then overvaluing the conservation easements to take federal tax deductions in excess of the price paid to buy in to the entities. The article reports that the two brothers are cooperating with prosecutors in their investigation of promoters, and that grand juries in Georgia, Missouri and North Carolina are currently considering charges against other promoters.
The Land Trust Alliance and attorney Steve Small have been instrumental in shining a bright light on these fraudulent syndicated transactions utilized to create tax shelters. A legitimate conservation easement donation is not a tax shelter, but is instead a valuable tool to accomplish land preservation for a landowner with true charitable and donative intent to preserve land in perpetuity. It is critical for the Internal Revenue Service (IRS) to halt fraudulent syndicated transactions by going after the overvaluations that are integral to these transactions, but the IRS needs to be careful not to view legitimate conservation easement donations with the same dirty lens.
On February 17, 2021, Douglas Land Conservancy (DLC) and Douglas County partnered to protect 2,558 acres with perpetual conservation easements on two Douglas County open space properties. Sandstone Ranch (2,038 acres) and the Schmidt Construction Open Space (520 acres) were both acquired by Douglas County in cooperation with the Chatfield Reservoir Mitigation Company to provide mitigation for the Preble’s meadow jumping mouse as part of the Chatfield Storage Reallocation Project. The purchase of Sandstone Ranch was also completed with funding from Great Outdoors Colorado. Continue Reading Douglas Land Conservancy Protects 2,558 Acres in Douglas County
On December 7, 2020, the Colorado Department of Revenue (CDOR) issued a general information letter [Colo. Dep’t of Revenue, Gen. Info. Letter GIL-20-003, 12/07/20] regarding the eligibility of a mutual ditch company to claim a Colorado conservation easement tax credit, except when a state governmental entity is a shareholder. CDOR determined that a mutual ditch company formed under Article 42 of Title 7, C.R.S., or under Articles 121 to 137 of Title 7, C.R.S., is a nonprofit corporation within the definition of 1 CCR 201-2, Rule 39-22-522(1)(e) and is qualified to claim the conservation easement tax credit. The letter clarified, however, that if a shareholder of the mutual ditch company is a state governmental entity, including municipalities and counties as political subdivisions of the state, the mutual ditch company and all of its members will be ineligible to claim the credit. This same reasoning applies to any nonprofit corporation with a state governmental entity as a shareholder.
Keep it Colorado announces its breathtaking new video “”Keep It Colorado: Creating a Colorado Where People, Lands, Waters and Wildlife Thrive.” The video was a collaboration of Keep It Colorado and its member land trusts and includes footage of properties preserved with conservation easements across the state. Bravo to Keep It Colorado and all of the land trusts involved in the making of the video!
Link to Video: Keep It Colorado Video
Colorado Open Lands (COL) announced today its merger with the Southwest Land Alliance (SLA), a land trust serving the south-central portion of Colorado and working primarily in Archuleta County for the past 40 years. SLA has conserved 44 properties on over 26,000 acres of land in southern Colorado. Funding for the completion of the merger was provided by Great Outdoors Colorado and the Jacob and Terese Hershey Foundation. The merger was effective December 31, 2020. Congratulations to both COL and SLA on this partnership!
in December, Douglas Land Conservancy (DLC) accepted conservation easement charitable donations on two separate properties in Douglas County for the permanent protection of open space and wildlife habitat. The Meyer family donated a conservation easement on 40 acres of land in Sedalia near the Pike National Forest. This newly-conserved parcel is adjacent to 440 acres already protected by the family with conservation easements held by DLC. An additional 38 acres in Sedalia along Highway 105 was protected with a conservation easement donated by a private landowner to DLC. Congratulations to DLC and to the landowners on the permanent protection of these beautiful properties!
Colorado Open Lands (COL) announced yesterday that the organization completed its 500th conservation project in Colorado this month. COL has now conserved more than 585,000 acres in Colorado. Congratulations to COL and to its dedicated staff, Board members and volunteers on this impressive milestone!
On November 25, 2020, the Internal Revenue Service (IRS) updated its Conservation Easement Audit Technique Guide with a revision date of November 9, 2020. The Guide is a reference document for IRS staff for the examination of charitable contributions of conservation easements. Although the IRS is quick to point out that the Guide is not a comprehensive training manual, the Guide does provide information about conservation easements generally and more specific information regarding the requirements for a valid charitable contribution, including citations to recent cases on relevant topics. Land trusts, landowners, and their attorneys can all benefit from reviewing the Guide as a checklist of the issues IRS auditors will be looking for when reviewing a conservation easement charitable contribution.
The Trust for Public Land (TPL) reports that 26 conservation measures supported by TPL in the 2020 election were approved by voters, amounting to nearly $3.7 billion in funding for land conservation, parks, climate resiliency and habitat. Four of these ballot measures were located in the Rocky Mountain region in Colorado and Montana. Continue Reading 2020 Conservation Ballot Measures Approved in the Rocky Mountains