Colorado has enacted one of the nation's most generous tax incentives for donations of conservation easements. Colorado's Tax Credit Transfer Program is designed to encourage land conservation by helping donors take advantage of these tax benefits. Learn more about the tax incentives extended through 2011 in this brochure.

Colorado conservation tax credits are available to donors of "qualified" conservation easements.  Colorado taxpayers who donate a qualified easement may claim a state tax credit worth 50% of the value of the easement donation, up to a maximum credit of $375,000.  The State of Colorado allows these credits to be carried forward for 20 years, during which time they may be used to offset the donor's state income tax liability, or transferred one time to other Colorado taxpayers. For more information on transferring tax credits, click here.

Many tax credit brokers around the state help landowners sell the credits that they cannot personally use to other taxpayers seeking to reduce their state income tax liabilty. As more landowners take advantage of this program, all of Colorado benefits from the preservation of more open space for future generations to enjoy.

How it works

The donor of a conservation easement receives a tax credit from the state based on the value of their easement as determined by a qualified appraisal. Brokers will then match easement donors with credit buyers on a first-come, first-served basis. Credit buyers purchase the credits at a discounted rate, and the donor then receives approximately 80-83% of their credit value in cash. 

The buyer may use the full value of the credit purchased to offset their Colorado income tax liability.  Transaction costs are included in the discounted price to the seller, and buyers are provided with full documentation about the easement credit they are buying, as well as indemnification from that the seller will reimburse the buyer if the credit should be disqualied in the future for any reason by the IRS or Department of Revenue.

AVLT offers to match its easement donors wishing to sell tax credits with buyers. We cannot guarantee that we will be successful in finding buyers for all of our clients; therefore, we assist sellers on a first-come, first-served basis according to the date of easement donation.

AVLT provides all of the necessary documentation for the transfer of the credits and coordinates the transfer between the buyer and seller. Program participants sign an agreement whereby the seller warrants that the credits are valid, and the buyer is indemnified against the future disqualification of the credit. AVLT cannot act as tax advisors to either party in this transaction. All parties are encouraged to obtain their own tax advice.