This article first appeared in INHF's Fall 2008 magazine.
by Stacie Bendixen
Adams County Conservation Board |
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Land donations for conservation have always provided a way to guarantee your family legacy. Now, thanks to a change in Iowa tax law, these donations also provide generous income tax credits, which can cut the true cost of your donation in half. |
Thanks to a new state tax credit, more Iowans will be financially able to leave a natural legacy for future generations.
Law of the land
The new Iowa law, which takes effect in the 2008 tax year, provides a generous state income tax credit for Iowa residents who donate land or land rights to a qualified conservation organization. In other words, if you donate land or a conservation easement – or sell either at a bargain price – you can subtract up to 50 percent of your donation’s value from your state income tax bill.
The maximum tax credit available per gift is $100,000. If your credit exceeds the state income tax you owe in the year you donate, you can carry forward the remaining credit for up to 20 years.
Rewarding generosity
Before this new credit, land donations for conservation could be claimed only as an itemized charitable deduction from both state and federal income taxes. With a tax deduction, the value of your donation is subtracted from your taxable income, and your taxes are calculated accordingly. How much you save depends on your income bracket. Those with modest income might receive little or no tax benefit.
With Iowa’s new income tax credit, you subtract half the value of your donation directly from your final tax bill, which generally results in much greater savings. In addition, you can still claim your federal itemized charitable deduction.
Everyone wins
Because the law reduces the real cost of donating, many more landowners can consider protecting their land as a conservation legacy. Other states offering similar tax credits have seen substantial increases in land-related giving. Everyone benefits: landowners willing to share their good fortune, wildlife whose habitats are preserved, and future Iowans who will have greater access to quality natural resources.
The state tax credit was a major policy initiative by INHF to benefit conservation and Iowa landowners. INHF staff researched and guided the measure through the legislative process, while gathering support from the sustainable natural resources funding coalition and a legislative study committee.
“We really appreciate the work of so many lawmakers who understood that conservation budgets could not keep pace with land inflation, so they supported this innovative tax policy to encourage more voluntary land protection,” said INHF Public Policy Director Duane Sand.
Stacie Bendixen is a senior writing major at Drake University and a Buckmaster intern at INHF.
For more information, e-mail Cathy Engstrom, Director of Communications, or call (515) 288-1846.