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Originally Posted by Cameron Swift
I read the NYT articles, but I'm not particularly well versed in taxes. Am I understanding the below correctly? That in exchange for not making changes to a heritage property, he received a $21 million dollar tax credit? How does that work exactly?
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In exchange for making a deal to conserve the land he received a $21 million dollar tax credit. And to be clear you can't just make a couple 'changes' to a property and get the tax credit.
The conservation easement clause requires the land owner to actually invest in conserving the land. I.E. one way it is used is if a multi-generational ranch is running into land tax issues that can easily bankrupt a ranch that has thousands of acres but cannot generate enough income to pay the land taxes, they can conserve a part of their ranch, and maintain a wildlife refuge such as an elk habitat. There are certain stipulations that need to be met, but it is often easily accomplished and the land owners are more than well versed in how to conserve the land.
Something like this is very common and when a lot of the multi-generational ranches are eventually sold it is often in combination with a conservation or wildlife protection area. Those conservation areas are then combined with federally protected land and create a big holding meant to protect and preserve that area and the wildlife in it.
Almost 75% of the ranches for sale in the US right now have a conservation easement as part of the agreement and it is a great way to help maintain and protect the land.
Of course that means rich people like Trump, Ted Turner, John Malone, Jeff Bezos, Irving Family and others will all be taking advantage of this as well and are buying up land like crazy.
And from what I understand, though I'm not 100% sure, I believe real estate write offs from one holding can be used to to help depreciate the assets in another holding and vice versa.
So in theory the conservation easement is a great idea, and has created millions of acres that are well kept, protected wildlife refuges, but it has also come with its share of consequences.