(913)-777-7082 mgreenway@midwestmoa.com

Frequently Asked Questions


A conservation easement is a restriction placed on a piece of property to protect the resources associated with the parcel. The easement is a legally binding covenant that is publicly recorded and runs with title to the property in perpetuity. The conservation easement conditions transfer with the deed of trust, thus requiring any new owner to abide by the original conservation easement deed terms.

The easement gives the holder the responsibility to monitor and enforce the property restrictions imposed by the easement. An easement does not grant ownership nor does it absolve the real property owner from traditional owner responsibilities such as property tax, upkeep, maintenance, or permitted improvements.


Conservation easements may only be placed by a real property owner. If the property is jointly owned, all owners of the property must consent to the easement. If the property is mortgaged, the mortgage holder must also consent.


Since a conservation easement is granted in perpetuity, it is necessary for an outside party to “hold” the easement and monitor and enforce the property restrictions of current and future property owners. The holder may be a publicly supported nonprofit organization designed to hold the easement.  MMOA is an IRS recognized, 501(c)(3) nonprofit organization that is a legal recipient of conservation easements.


Dependent on the type of natural resource, scientists perform various natural resource assessment evaluations including Floristic Quality Assessment, Critical Habitat Assessment, Endangered Species Evaluation, and Wetland
Determinations. Information contained in the associated scientific report can be utilized to determine the ecological value of the subject site.

In addition, some scientific technology companies can provide complete design, construction oversight and assistance with USACE authorization to construct on-site wetland mitigation and riparian restoration areas.


A special rule applies for contributions of interest subject to a mortgage.

Treas. Reg. section 1.170A-14(g) (2) disallows a deduction unless the mortgagee agrees to subordinate its rights in the property to the right of the donee to enforce the conservation purposes in perpetuity.

How Do You Determine EASEMENT VALUE

As a general rule, the value of a perpetual conservation easement can be calculated as the net change in fair market value of the burdened property caused by the contribution of the restriction, referred to as the “before and after” method. If there is a substantial record of sales of comparable easements, however, the fair market value of the donated easement must be based on the sales prices of comparable easements (Treas. Reg. section 1.170A-14(h) (3)(i)).

Because sales of conservation easements are rare, perpetual conservation restrictions are usually valued using the
“before and after” method. In applying this method, the value of property before the gift of the easement is based on the highest and best use of the property in its current condition unrestricted by the easement.

An appraisal by a qualified professional is required to substantiate the income tax deduction for certain conservation purposes or any deduction in excess of $5,000 (Treas. Reg. section 1.170A-14(i)).


A Federal income tax deduction under Section 170 of the Internal Revenue Code of 1986 is allowed if the transfer constitutes a “qualified conservation contribution” as defined in section 170(h).

There are four basic requirements of a qualified conservation contribution:

  1. The property contributed must be a ” qualified real property interest.” Generally, a property contribution meets the qualification if the contribution is the donor’s entire interest, a remainder interest, or a permanent restriction in perpetuity placed on the use which may be made of the real property.
  2. The property must be donated to a ” qualified organization” such as a publicly supported charitable
    organization, described in IRS section 170(b)( l)(A)(vi) or 509(a)(2) with a commitment to protect the
    conservation purpose of the donation per Treas. Reg. section 1.1 70A-14(c)(1).
  3. The gift must be for “conservation purposes” including the preservation of land areas for outdoor recreation by, or education of, the general public; protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem; preservation of open space, including farmland and forest land, for the scenic enjoyment of the general public or pursuant to a clearly delineated governmental conservation policy, provided such preservation will yield a significant public benefit; and preservation of a historically important land area or a certified historic structure.
  4. The contribution must be “exclusively for conservation purposes.” Easements that provide perpetual
    protection are treated as made exclusively for conservation purposes.

A donor who makes a qualified conservation contribution must reduce the adjusted basis in the portion of the property retained by the amount of the total adjusted basis of the property allocable to the interest contributed. The portion of the adjusted basis allocable to the qualified real property interest is determined by the ratio of the value of the qualified real property interest to the value of the property before granting of the restriction (Treas. Reg. section 1.1 70A-14(h)(3)(iii)) .

What Other BENEFITS Are Received

A qualified conservation contribution may reduce the real property owner’s property tax because the easement reduces the development potential of the property. Additionally, a conservation easement allows real property owners to protect features on their property that they wish to preserve. Finally, a conservation easement allows real property owners to maintain private ownership of the land.

What RIGHTS Are Relinquished

In contributing a qualified conservation easement, a real property owner is relinquishing rights to exclusive possession. The property owner will still have alienation rights to the property but because the easement will run with the land and bind all subsequent owners, the value will likely be less to a third party purchaser. Finally, in order for the real property owner to receive income tax benefits, the easement must be perpetual; thus, the real property owner is permanently relinquishing these rights in the property.


Contributions to a qualified organization will be limited to 50% of the individual’s contribution base for the tax year under section 170(6) (1) (E). Effective for contributions made in taxable years beginning after 2005 and before 2010, section 170(b)(l)(E), as added by the Pension Protection Act of 2006, allows an individual to deduct any section 170(h)(l) qualified conservation contribution, as described above, to the extent the aggregate of such contributions does not exceed 50% of the individual’s contribution base over that amount of all other charitable contributions allowable under
section 170(b)(1).

Additionally, to the extent these new limits preclude the use of a portion of qualified conservation contributions for a particular year, the excess contribution can be carried forward up to 15 years (section 170(b)(1)(E)(ii)). If the donor is a farmer or a rancher, special rules are applicable that increase the limits. Internal Revenue Service Form 8283 must be completed by the easement donor and the qualifying organization must sign the form to acknowledge receipt of the easement. For additional assistance, Notice 2007-50, 2007-25 I.R.B. 1430, provides guidance on the section 170(b)(1) (E) percentage limits for qualified conservation contributions in a question and answer format.


In compliance with requirements imposed by the IRS pursuant to IRS Circular 230, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.


For More Information

⏵For questions about conservation easement donations, contact:

Mr. Mark Greenway
Director, Midwest Mitigation Oversight Association Inc. (MMOA)
816-585-5635 or 913-777-7082


⏵Consult with your tax attorney and/or accountant for any tax-related questions or information.