Preserving land through a voluntary conservation easement is a remarkable gift to your community. If you are interested in pursuing conservation of your land, consider the following steps:

• Learn about easements by contacting your local land trust and an attorney familiar with conservation law. Schedule a site visit with the land trust to determine if your land is eligible. Discuss any requirements and transaction costs involved, as well as potential tax benefits for a qualified donation.
• Work with the land trust to create a conservation plan that identifies the potential conservation values that you would like to see preserved, as well as any reserved rights. Filling out a Landowner's Conservation Planning Sheet with help this process along.  
• Talk with your family, attorney and qualified accountant to determine if an easement fits with your family's goals, and to learn the learn the legal and financial implications of doing so.  We recommend that your attorney and accountant review your situation early on to determine if you are eligible to claim a Colorado conservation tax credit (generally the easement property must be owned by a qualified Colorado taxpayer - see the Colorado Department of Revenue's Taxpayer Service Division FYI 39 for more information).
• Contract with a qualified organization such as AVLT to begin the process (which may take several months!).  AVLT will first order a title commitment for the subject property to determine the status of ownership, mortgages, mineral interests, water rights, and other encumbrances.  Any mortgages or liens must be subordinated to the conservation easement using AVLT's mortgage subordination form (available on request).  If the mineral rights are severed, the IRS requires a geologist to complete a mineral assessment detailing the likelihood of surface mining on the property.  Also required by the IRS, AVLT will order a baseline inventory to document the conservation values and present condition of property at the time of donation.
• The land trust will work with you to prepare a Deed of Conservation Easement - both sides should have legal counsel. The document must be signed and recorded before the easement becomes valid.
• Obtain a qualifed appraisal  that compares the "before" value of the land to its value after encumbrance with an easement to determine the value of the gift for IRS tax purposes.  This is an extremely important document that must be accurate and well-informed.  A land trust may decline to accept an easement whose value it believes to be overstated or otherwise indefensible.  We recommend that potential donors provide their appraiser with a completed appraisal information form, and then review the appraisal carefully!
• If your easement is eligible for Colorado conservation tax credits, determine whether or not you would like to use these credits or sell them to another Colorado taxpayer. Notify your land trust and register with a tax credit broker early if you decide to sell your credit.
• File IRS form 8283 by April 15, signed by the land trust and your appraiser, to claim a federal income tax deduction. Click here for instructions on filing.
• File Colorado Dept. of Revenue form DR 1303, 1304 and 1305 by April 15 in order to claim or transfer your Colorado tax credit.
• Expect an annual monitoring visit from your land trust to verify that the easement is being honored.

Criteria, checklist and financial requirements for creating a conservation easement

Lazy H/11 Ranch