Today the Colorado legislature passed HB21-1233, the Conservation Easement Enhancement and Rural Stimulus Act.  The Act was proposed and shepherded by Keep It Colorado, and will now proceed to the Governor’s desk to be signed.

The Act modifies the Colorado conservation easement tax credit program by increasing the amount of tax credits that a landowner can obtain from a conservation easement donation to 90% of the fair market value of the conservation easement up to a maximum of $5,000,000.  This increase will be retroactive to January 1, 2021.  Certain water entities are also now allowed to receive tax credits, including government entities who will receive a transferrable expense amount which may be transferred to an entity that can use the amount as a tax credit.  And the Act modifies certain administrative procedures, including the process used to track sales of tax credits.

Congratulations to Keep It Colorado and the conservation community on this important win!

Today the Biden Administration released a preliminary report to the National Climate Task Force titled Conserving and Restoring America the Beautiful.  The report provides a vision and plan to preserve at least 30% of the country’s land and waters by 2030 with a locally led America the Beautiful campaign. Continue Reading America the Beautiful Campaign: The Next Step for the 30×30 Goal

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Source: Creative Commons

On April 19, 2021, the Internal Revenue Service (IRS) announced the formation of the Office of Promoter Investigations (OPI) (IR-2021-88) to increase the focus of the IRS on the promoters of abusive tax avoidance transactions, including abusive syndicated conservation easements.  The new OPI will coordinate the efforts of various business divisions, including Large Business & International, Tax Exempt/Government Entities, the Office of Fraud Enforcement, and Criminal Investigations, with a focus specifically on promoters of abusive transactions and the schemes utilized by those promoters.  The OPI will channel its resources to increase detection and deterrence of promoters throughout the IRS.  The acting director of the new OPI is Lois Deitrich, a 20-year veteran of the IRS who earned her master’s degree in tax from the University of Denver and is a both a CPA and a certified fraud examiner.

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

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Source: Patricia Henschen, Creative Commons

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!