How to Put Land in Conservation: Easements, Costs, and Tax Deductions

To put land in conservation, you either donate the property outright to a qualified land trust or government agency, or — far more commonly — you keep ownership and place a conservation easement on it, a legally binding agreement that permanently restricts development. The process runs anywhere from a few months to more than a year, and involves choosing a partner organization, negotiating which rights you give up and which you keep, documenting the property’s condition, and recording the agreement in county property records. If you donate an easement, you can claim a federal income tax deduction of up to 50 percent of your adjusted gross income, with any unused portion carrying forward for up to 15 years.

Donation or Conservation Easement

A full donation transfers complete title to a land trust, government agency, or similar organization. The recipient takes over all management, and you walk away. This makes sense when you have no interest in continuing to use the land.

A conservation easement is what most landowners choose. You keep ownership and voluntarily give up specified development rights through a recorded agreement. An easement might prohibit residential subdivision or commercial construction while still allowing farming, forestry, hunting, or recreation. Every easement is negotiated, so no two look exactly alike. Once recorded, the restrictions run with the land and bind every future owner.

Whether Your Land Qualifies

Federal law requires that a donated easement serve at least one of four recognized conservation purposes:¹

Preserving land for outdoor recreation or education by the public
Protecting a relatively natural habitat for fish, wildlife, plants, or similar ecosystems
Preserving open space (farmland, forest, scenic land) for public scenic enjoyment or under a clearly defined government conservation policy, yielding a significant public benefit
Preserving a historically important land area or certified historic structure

The “significant public benefit” test under the open-space category is where many landowners stumble. The property doesn’t need to be pristine wilderness, but it must offer something meaningful to the broader community: productive farmland visible from a public road, a wildlife corridor between protected areas, or watershed protection for a local water supply.

Choosing a Land Trust or Agency

The organization you pick will monitor your property for as long as the easement exists, which for a perpetual easement means forever. Match their mission to your land. A trust focused on agricultural preservation fits a working farm better than one built around urban greenways.

Accreditation by the Land Trust Alliance is a useful signal. Accredited trusts must meet national standards for governance, financial management, and long-term stewardship, and the organization’s stability directly affects whether your easement will be meaningfully enforced decades from now. Talk to more than one. Ask how they monitor, how they respond to violations, and whether they require a stewardship endowment contribution at closing.

The Conservation Easement Process

Some easements close in a few months, others stretch past a year, but the sequence is consistent.

Site Visits and Reserved Rights

Representatives from the land trust visit the property to evaluate its conservation values and talk through your goals. This is when you identify which rights you want to keep — farming, a modest addition, timber harvest under a management plan — and which you’ll give up. These “reserved rights” become a central part of the easement deed. Be specific, and think long-term. The restrictions will bind your heirs and any future buyer.

Title, Survey, and Mortgage Subordination

You’ll need an accurate boundary survey with a legal description, a current title report identifying all owners and any encumbrances, and your property deed. Liens, judgments, outstanding taxes, mineral leases, and life estates can all create problems that must be resolved before closing.

If the property has a mortgage, the lender must formally subordinate its interest to the conservation easement. Without subordination, the IRS will deny any tax deduction, because the lender’s foreclosure rights could theoretically wipe out the conservation restrictions. This is a non-negotiable federal requirement and applies to every mortgage placed on the property before the easement is recorded.² Getting lender sign-off takes time, so start that conversation early.

If the property has subsurface mineral interests, raise it early too. Federal regulations allow you to retain a “qualified mineral interest” while still making a qualifying donation, but the picture gets complicated fast if someone else owns the minerals beneath your land or if extraction would damage the surface values you’re trying to protect.²

Negotiating and Drafting the Deed

You and the land trust, each with your own legal counsel, negotiate the specific terms. The deed spells out the conservation purposes being protected, the prohibited activities, and your reserved rights, and identifies who holds the easement and their authority to enforce it. Take this seriously. The document will outlast you, and every ambiguity is a future dispute waiting to happen.

Baseline Documentation Report

Before closing, the land trust prepares a baseline documentation report that records the property’s condition at the time of the agreement. It includes written descriptions, maps, and photographs of the conservation values being protected and the relevant condition of the land. You and the land trust both sign it, and it becomes the benchmark against which all future monitoring is measured. If a dispute arises years later about whether the property has changed, the baseline report is the first piece of evidence everyone reaches for.³

Qualified Appraisal

To claim a federal deduction, you need a qualified appraisal by a qualified appraiser — someone who meets the IRS’s education, experience, and designation requirements. The appraiser uses a “before and after” method: fair market value with no restrictions, minus value subject to the easement. The difference is the value of your donation.

Timing is strict. The appraisal must be completed no earlier than 60 days before you make the donation and no later than the due date (including extensions) of the tax return on which you claim the deduction. You’ll file Form 8283 (Noncash Charitable Contributions) with your return, and both the appraiser and the land trust must sign Section B.⁴

Closing and Recording

You sign the easement deed and record it in the county property records. From that moment forward, anyone who buys or inherits the land takes it subject to the restrictions.

Costs to Plan For

Even a donated easement isn’t free. Budget for:

Qualified appraisal. Simple parcels might run $1,000 to $2,000; large or complicated properties cost more. This is your expense, not the land trust’s.
Legal counsel. You need your own attorney, separate from the land trust’s, to review and negotiate the deed. Fees depend on complexity and your local market.
Title work and survey. If your existing survey is outdated or missing, budget for a new one.
Stewardship endowment. Most land trusts require a one-time contribution at closing to fund perpetual monitoring and enforcement. The endowment is invested, and the returns cover annual monitoring indefinitely. The amount varies by organization and property, and it is often one of the largest out-of-pocket costs of the transaction.

Some of these costs may be offset by the tax deduction, but they require cash up front.

Federal Income Tax Deduction

Donating a perpetual conservation easement to a qualified organization can generate a federal income tax deduction under IRC Section 170. The deduction equals the appraised value of the rights you gave up, using the before-and-after method.

The deduction is capped at 50 percent of your adjusted gross income in the year of the donation. Any unused portion carries forward for up to 15 succeeding tax years, so a large donation isn’t lost even if it exceeds your income in year one.¹

Qualified farmers and ranchers get a better limit. If more than 50 percent of your gross income for the year comes from farming, you can deduct up to 100 percent of AGI for a qualified conservation contribution on agricultural land, with the same 15-year carryforward. The land must remain available for agricultural or livestock production under the easement terms to qualify for this enhanced limit.¹

Estate Tax and State Incentives

Conservation easements can also reduce federal estate tax on your heirs. Under IRC Section 2031(c), estates may exclude from their gross value up to 40 percent of the easement-encumbered land’s value, capped at $500,000. The exclusion percentage decreases if the easement reduced the land’s value by less than 30 percent at the time of the original donation. For families trying to keep rural land intact across generations, this benefit alone can make conservation work financially.

Roughly 14 states and territories offer some form of state income tax credit for conservation easement donations. Some are transferable, letting you sell unused credits to other taxpayers; others give a fixed percentage credit against state income tax. Many jurisdictions also lower local property tax assessments on easement-encumbered land, because the restrictions reduce market value.

Getting Paid: USDA Purchase Programs

Not every conservation easement is a donation. The USDA’s Agricultural Conservation Easement Program (ACEP) will pay you for an easement on qualifying land. Agricultural Land Easements protect working farms and ranches by limiting non-agricultural uses, with USDA partnering with land trusts and state or local governments to fund the purchase. Wetland Reserve Easements protect, restore, and enhance degraded wetlands; they can be permanent or 30-year, and USDA helps fund restoration work. If you want to conserve the land but need income rather than a tax deduction, contact your local NRCS office to discuss eligibility.⁵

Life After the Easement

Recording the easement doesn’t end your involvement, it reshapes it. You still own the property, pay property taxes, and make day-to-day management decisions within the easement’s boundaries. The land trust’s role shifts to stewardship.

Monitoring happens at least once per calendar year. Many land trusts conduct on-the-ground visits annually, walking the property, photographing its condition, and comparing it to the baseline report. Some use aerial imagery in certain years with physical visits at least every five years. The land trust typically notifies you in advance and welcomes your participation.

If you want to make a change on the property — build a barn in a permitted location, thin a woodlot, add a trail — check with the land trust first. Most easement deeds require advance notice or approval for certain activities, and a short conversation prevents an accidental violation.

When Terms Are Violated

Easement holders have a legal obligation to enforce the terms. Enforcement typically starts with a conversation and a request to restore the property. If that fails, the land trust can seek a court injunction ordering the landowner to stop the activity and undo the damage. Courts have ordered landowners to demolish unauthorized structures and restore native vegetation. In many states, the attorney general also has independent authority to enforce conservation easements on behalf of the public. Treat the restrictions the way you’d treat a zoning ordinance.

How Permanent Is Permanent

A perpetual conservation easement is designed to last forever, and the vast majority do. The law allows for modification or termination only in narrow circumstances. Under the doctrine of cy pres, a court can amend or extinguish a conservation easement when subsequent, unexpected changes make the original conservation purpose impossible or impractical to achieve — a catastrophic change in the landscape, not a landowner who changed their mind. Even then, courts try to direct any proceeds from the property’s sale or development toward a purpose as close as possible to the original goal. Treat perpetual as perpetual.

Steer Clear of Syndicated Easement Deals

The IRS has spent years targeting abusive conservation easement transactions, and the consequences of getting caught are severe. The primary target is the syndicated conservation easement, where a promoter acquires property, brings in investors through a partnership, inflates the appraised value of a donated easement, and passes through deductions that can reach 2.5 times or more of each investor’s actual investment. The IRS classified these arrangements as “listed transactions” in 2017, meaning participants must disclose them or face additional penalties.⁶

Federal law now caps the deduction for a conservation contribution by a partnership or S corporation at 2.5 times the relevant basis of each partner or shareholder, with limited exceptions for family partnerships, contributions made before a three-year holding period, and certified historic structures.¹ If someone pitches a conservation easement investment promising tax deductions that dwarf your actual cash outlay, walk away. The IRS challenges these transactions using accuracy-related penalties, valuation misstatement penalties, and extended statutes of limitations.

1
Office of the Law Revision Counsel. 26 USC 170 Charitable, Etc., Contributions and Gifts
2
eCFR. 26 CFR 1.170A-14 – Qualified Conservation Contributions
3
Land Trust Alliance. Practice 11B: Baseline Documentation Report
4
Internal Revenue Service. About Form 8283, Noncash Charitable Contributions
5
USDA Natural Resources Conservation Service. Agricultural Conservation Easement Program (ACEP)
6
Internal Revenue Service. Syndicated Conservation Easement Transactions Notice 2017-10