how to claim the iowa tax credit for charitable conservation contributions of land

Thanks to new legislation passed in 2008, Iowa taxpayers can now claim a substantial Iowa tax credit when they make a charitable donation of land or a conservation easement for conservation purposes (full value or bargain sale) to a qualified conservation organization.

Example 1
Donated land or conservation easement value under $200,000

  • You donate land valued at $150,000 to your county conservation board.
  • You can claim an Iowa state tax credit of $75,000 (half of $150,000).
  • You can also claim an itemized deduction of $150,000 as a charitable contribution on your federal income tax (the same as in the past).

Carry forward: If you cannot use the entire tax benefit this year, you can carry the value of the Iowa tax credit forward up to 20 years (the year of the gift plus 19 years). You can carry the federal deduction forward up to six years (the year of the gift plus five years).

Example 2
Donated land or conservation easement value exceeds $200,000

  • You can count $200,000 of your donation toward your Iowa income tax credit — so you claim the maximum $100,000 tax credit allowed (50% of $200,000).
  • In addition, you could calculate the remaining value of your donation ($500,000 minus $200,000) to claim a $300,000 Iowa itemized deduction.
  • Meanwhile, you can claim the full $500,000 as an itemized deduction on your federal tax return. For more information on the federal deduction, including the higher rate for conservation easement donations, see note below and more at the Land Trust Alliance website.

Carry forward: If you cannot use the entire tax benefit this year, you can carry the value of the Iowa tax credit forward up to 20 years (the year of the gift plus 19 years). You can carry the federal deduction forward up to six years (the year of the gift plus five years).


For more information

Related links on the Iowa income tax credit for contributions of conservation land, effective for the 2009 tax year:

More information on tax issues:
Income taxes | Capital gains taxes | Estate & inheritance taxes | Property taxes | Cautions

This factsheet is provided for information only. Always consult your attorney or tax advisor for legal or professional advice for your situation.

This information released October 2008, Iowa Natural Heritage Foundation