April 28, 2023 2:43 am

Fix Your Conservation Easement Deed Now or Never

A conservation easement donated to charity gives the donor a charitable contribution deduction. But to qualify, the easement must meet certain conditions, including that it be in perpetuity (forever). The ability to make changes in the property donation can kill a potential deduction. Fortunately, SECURE Act 2.0 spelled out safe harbor deed language for the extinguishment and boundary line adjustment clauses for a conservation easement and donors can use this to ensure their donations are qualified. However, deeds must reflect the acceptable language within a set time limit. The IRS specified that this must be done by July 24, 2023 (Notice 2023-30). Here’s what to do:

  • Amend any deed that doesn’t reflect the correct language with respect to any extinguishment and boundary line adjustment clauses. Use the clauses in Notice 2023-30 for this purpose.
  • Have the amended deed signed by the donor and the donee (the charity) and record it on or before July 24, 2023.
  • Be sure the amendment is treated as effective as of the date of the recording of the original easement.
advertisement
Tax Glossary

Short tax year

A tax year of less than 12 months. May occur with the startup of a business or change in accounting method.

More terms