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News & Views |Bipartisan Lawmakers Urge Expansion of Conservation EasementsThursday, September 30, 1999 OnLine A bipartisan group of lawmakers testifying before the House Ways and Means Committee Oversight Committee September 30 called upon Congress to make qualified conservation easements more widely applicable, and asked for a general expansion of tax incentives to encourage better land-use policy. "Conservation easements may not sound exciting, but preserving the environment for our children and grandchildren is one of the most important challenges we face," said House Ways and Means Oversight Subcommittee Chairman Rep. Amo Houghton, R-N.Y. The Taxpayer Relief Act of 1997 added an exclusion from estate taxes for gifts of conservation easements, if the land is within a certain proximity to protected areas. An executor of an estate may exclude 40 percent of the value of any land subject to a qualified conservation easement, up to a maximum of $200,000 in 1999, $300,000 in 2000, $400,000 in 2001, and $500,000 in 2002 and thereafter. Nancy Johnson, R-Conn.,
introduced a bill (H.R. 2263) that would repeal the current limits on the value of the
easements, and the current restrictions concerning where the property is located. |
Analysis: The timing of the hearing suggests that Congress will not take action on this legislation this year. Congress plans to adjourn by October 29, but their adjournment may stretch out until November. In addition to the lack of time, no vehicle for the legislation exists. It is increasingly unlikely that a modest tax-cut will be enacted this year, and there is no real interest in adding the legislation to the other remaining vehicle, a bill extending the expiring provisions. The oversight panel has come under pressure from constituents who want the conservation easement exclusion expanded, and that is the main reason the panel held the hearing, congressional aides said. It is possible that legislation expanding the exclusion will be included in a tax
cut that Congress enacts next year, but the reduction probably would have to be more than
just a small-sized tax extenders bill. |
The Need for Guidance Rep. Wayne Gilchrest, R-Md., complained that the IRS has not issued guidance on which type of land is covered by the exclusion. Specifically, does land managed by the National Park Service that is not classified as a national park qualify for the exclusion, Gilchrest asked. Analysis: Ambiguity in the tax law has not dissuaded taxpayers from engaging in conservation easements. In fact, the tax law benefits from the exclusion usually are not what drives landowners to conserve their property. The desire to see their land remain undeveloped provides many landowners with the impetus they need, and the exclusion is more of a side benefit. |
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