In light of Colorado HB-1353 going into effect on July 1, 2008, and the recent passing of the Food, Conservation and Energy Act of 2008 (the “Farm Bill”) by Congress, the Colorado Coalition of Land Trusts (CCLT) sent out a timeline and legal analysis from Isaacson Rosenbaum P.C. last Friday. According to the Denver law firm:
“Colorado House Bill 08-1353 creates new reporting and submission requirements for appraisers, and new review and enforcement duties in the Department of Revenue, Division of Real Estate, and the Board of Real Estate Appraisers. The bill also creates a new Conservation Easement Oversight Commission to oversee conservation easement transactions for which a Colorado conservation tax credit is claimed. Land trusts accepting conservation easements for which a tax credit is claimed must complete a conservation easement holder certification process. Finally, HB 1353 imposes a new tax basis limitation on conservation tax credits for property held for less than one year, aligning the state program with federal tax requirements.”
“The Farm Bill extends the expanded tax incentives for charitable contributions of qualified conservation easements from the Pension Protection Act of 2006. Retroactive from January 1, 2008 through December 31, 2009, the Farm Bill extended the Pension Act’s expansion of the amount of the deduction available for donations of qualified conservation contributions from 30% to 50% of adjusted gross income, and up to 100% of AGI for farmers and ranchers. The Farm Bill also extended the expansion of the deduction’s lifetime, or its ‘carryforward’ period, from five to fifteen years. Finally, the Farm Bill included $733 million in funding over five years for the Farmland Protection Program, and re-established the Grasslands Reserve Program, targeting 1.22 million acres for protection with an estimated $300 million in funding.”
To read the full analysis by Isaacson Rosenbaum, click here.
In addition, CCLT offered the following timeline for these legislative developments in the conservation community:
July 1, 2008
- Governor may appoint Conservation Easement Oversight Commission.
- The Department of Real Estate may begin any necessary rulemaking for the Conservation Easement Oversight program.
- Appraisers must begin submitting final conservation easement appraisals along with an affidavit and fee to the Division of Real Estate.
January 1, 2009
- Non-profit easement holders (land trusts) can begin applying for certification.
April 15, 2009 (repeats annually)
- All easement holders must submit the form DR 1299 required under C.R.S. 39-22-522 to the Department of Revenue and the Division of Real Estate by this date.
January 1, 2010
- All non-profit easement holders (land trusts) must be certified by this date in order for donors to receive the state tax credit.
- Government entities and historic preservation groups may begin to apply for certification.
January 1, 2011
- All government entity and historic preservation easement holders must be certified by this date in order for donors to receive the state tax credit.
If you are already an easement donor in Colorado, CCLT offers the following guidance:
- Taxpayers must continue to submit information about the conservation easement donation on Forms DR 1303, DR 1304, and DR 1305.
- In order to receive the state tax credit, an easement must be donated to a certified organization once that specific type of entity is required to be certified.
- If an easement is donated to a certified holder (at the time of donation) which subsequently loses certification, the tax credit will remain valid. It is the responsibility of the landowner to check the certification status of an easement holder with the Division of Real Estate (an online status list will be maintained).