Landowners, perhaps more than any other single group, hold the key to our region’s well-being. Their careful stewardship of our natural lands and working farms gives Southwestern Colorado its unique character. Increasingly, landowners are recognizing the incalculable value of our region’s open spaces and choosing to ensure the future of their land through the use of conservation easements.
Frequently Asked Questions
A conservancy or land trust is a private, nonprofit 501(c)3 organization that serves its community by conserving land that is of significant value to its community.
A conservation easement is a legal agreement with a landowner to protect their property from development. The result is that the land continues to belong to that landowner, and the open space is protected for the benefit of the greater community, forever. Not all protected lands are open to the public, but the public benefits by the protection of open space, wildlife habitat, working family farms & ranches, and historical/archaeological resources in our community. Here in Durango, we have the unique partnership with the City to protect public recreational access on city park lands, such as the Oxbow Preserve, and Horse Gulch, Overend, and Dalla mountain parks.
No, a conservancy is an independent, private organization that works directly with private land owners in order to protect their land.
As a local, charitable organization under federal tax laws, a conservancy works directly with landowners by accepting donations of conservation easements in order to permanently protect open space, wildlife habitat, recreational parks, agricultural lands and historic/archaeological resources for the benefit of the community.
As a local charitable organization, the conservancy is closely tied to its community and understands the needs of its landowners as well as the greater community. Also, the nonprofit tax status of the conservancy offers many tax benefits to donors of conservation easements, land, and in-kind and monetary gifts. When it comes to protecting resources, a conservancy can be more flexible and act quicker than public agencies because it is a private organization.
Landowners who love their land choose to donate a conservation easement in order to permanently protect their land from inappropriate development while continuing to own the property. Each conservation easement in developed specific to a landowner’s needs and wishes, and is legally written to accommodate those needs while best protecting the resources of the land. Additionally, donating a conservation qualifies under the Internal Revenue Code as a “public charity”, which can entitle donors to significant tax savings.
A conservation easement is a permanent agreement between the landowner and the conservancy, and remains attached to the land regardless of the owner. The easement is recorded at the County Clerk and Recorder’s office, and is federally recognized in order to qualify for tax benefits.
Yes! You remain the owner of your land. Your conservation easement is developed specifically for your needs and goals in owning, working and living on the property. You voluntarily work with the conservancy to choose limits to the development of your land. Your property does not become government property.
No. However, LPOSC will likely only accept easements that prohibit large-scale subdivision and development for mining, non-agricultural commercial, and industrial uses. They do not have to ban all future development. Conservation easements are intended to be flexible enough to permit limited residential development, as well as permit working family farm and ranch operations. The terms of an easement are decided by the landowner, but the land trust will only assume management if it meets requisite standards for conservation.
Yes! You remain the sole owner of the property with the right to sell it, and the easement will permanently be attached to the property, regardless of ownership. The new landowner will be subject to the same restrictions of the conservation easement that you were.
No. Public access to your property is entirely up to you. If you wish for your land to be public, that may be stated in the terms of the conservation easement agreement, but the easement itself does not mean that your land becomes a public access area.
No. By signing the conservation easement, you are agreeing to be a good steward of your property. LPOSC is required by law to monitor your property once a year to ensure the mutually accepted terms of the easement are being complied with. We will contact you in advance of this site visit so that you know we will be visiting your property, and you are always welcome to join us during that visit.
Because LPOSC is a nonprofit, charitable organization, there are a variety of tax benefits to donating a conservation easement to the conservancy. Donations of land, conservation easements, or money may qualify you for income or gift savings. The two main federal benefits associated with a conservation easement are possible reductions in income tax and estate tax liability. An independent appraisal of the value of the conservation easement, completed by a qualified appraiser, determines the amount of possible tax benefits. The amount and type of actual benefit depends on different factors, including the value, your income level, and the total amount of your estate. You should consult an attorney and/or financial advisor to fully understand the tax implications of such a donation.
Colorado Conservation Tax Credits are available to donors of “qualified” conservation easements. Colorado taxpayers who donate such qualified easements may claim a state tax credit, based on the fair market value of the conservation easement. The formula is 75% of the first $100,000 and 50% of any remaining donation up to a total maximum credit of $1.5 million. Colorado allows these credits to be carried forward for 20 years, during which time they may be used to offset the donor’s state income tax liability, or transferred one time to other Colorado taxpayers.
Only a qualified real estate appraiser can determine the value of a conservation easement for tax purposes. The qualified appraiser considers the property’s “before conservation easement” value at fair market and under current zoning, as well as the property’s “after conservation easement” value with the restrictions of the easement in place. The difference between these two numbers is the value of the conservation easement.
Yes. In order to complete a conservation easement, a few critical pieces of information must be completed, including the conservation easement appraisal, a baseline report of natural resources on the property, and a minerals assessment of the property. Most importantly, a stewardship fee is included in the cost of an easement, which makes the protection of your land in perpetuity possible.
La Plata Open Space Conservancy uses several different methods, alone and in combination, to protect land and meet landowner and community needs. LPOSC’s most common and effective method of land protection is the Conservation Easement, wherein a landowner donates certain property rights to the land trust in order to protect specific resources.
What is a Conservation Easement?
A conservation easement is a legally binding agreement made between a landowner and a conservancy, land trust, or municipality that limits future development while allowing for traditional uses such as residence, agriculture and forestry. Easements are recorded in the land records and become part of the title to the land.
Conservation easements are one of the most powerful and effective tools available for the permanent protection of private lands.
The Conservation Process
The process of making a conservation easement possible is not as complicated as you may think. Our goal at LPOSC is that landowners enjoy their experience in protecting their cherished lands, and learn about how their stewardship protects our natural resources. The process LPOSC follows to finalize a conservation easement is standardized — knowledgeable staff, board members, and consultants are involved every step of the way.
Conservation begins when a landowner contacts LPOSC and expresses her or his wish to donate a conservation easement. LPOSC will provide conservation easement information, review the landowner’s application and proposed plans for conservation, conduct site visits to the property, and determine whether or not the conservation easement meets LPOSC criteria. Once the LPOSC Board of Directors has reviewed a proposal, a determination is made.
With approved applications, the landowner signs a Grantor Agreement, pays a retainer fee to cover initial costs for hiring consultants, and the conservation easement process continues.
The Landowner provides LPOSC with a title commitment for the property, and arranges for a conservation easement appraisal to be completed by a certified conservation easement appraiser. If a mortgage exists on the property, LPOSC requires that landowners obtain a subordination, assuring the process may continue.
With the title commitment (and subordination, if necessary) on file and Grantor Agreement signed, LPOSC proceeds with hiring the consultants to conduct a minerals assessment of the property and a baseline report of the natural and manmade features of the property. LPOSC consultants are experienced in accurately reporting on and documenting the resources protected by LPOSC conservation easements.
Colorado Parks and Wildlife is consulted regarding wildlife species and habitat as part of the baseline and conservation easement deed.
While the appraisal, minerals assessment, and baseline reports are being completed by consultants, LPOSC staff and board members will review the title commitment and draft a Deed of Conservation Easement to suit the needs of the landowner and to meet the requirements of LPOSC. The landowner then reviews the drafted deed with their legal counsel and works with LPOSC to achieve both parties’ goals in conservation of the property. Legal descriptions, maps, and supporting documentation for the property are prepared and included as exhibits to the deed.
With completed appraisal, minerals assessment, baseline report, and conservation easement deed, the Landowner and LPOSC finalize the conservation easement by signing all necessary documents in the presence of a notary signatory.
LPOSC then records the finalized, signed conservation easement deed with the county or counties in which the property is located and it becomes official record with the title to the property.
As of 2014, the State of Colorado requires that all Colorado Tax Credit-seeking donations be reviewed for accuracy and legitimacy by the CO Department of Regulatory Agencies (DORA). The conservation easement appraisal and deed are both reviewed thoroughly through this state-conducted review process.
This new step in the conservation easement donation process completely eliminates the risk of IRS audit to landowners and appraisers, and ensures conservation donations meet State of Colorado standards.
Upon completion of the DORA review process, landowners will be issued a certificate for CO State Tax Credits. A landowner can then either sell these Colorado Conservation Tax Credits earned in compensation for the Conservation Easement donation, or apply the tax credits to his or her state income tax liability.
Further, the landowner may wish to include the donation of the conservation easement as a other federal income tax deduction.
LPOSC recommends that a landowner consult with a tax advisor to ensure these incentives are fully recognized.
With a conservation easement in place, LPOSC maintains files for each property and works closely with each and every landowner to ensure their needs are met and the terms of the conservation easement are upheld. Annual monitoring site visits of the property are conducted by LPOSC to continue to strengthen this partnership over time.
LPOSC is available to its landowners when questions arise. When the time comes for a landowner to transfer the land to a new owner, LPOSC then begins a new partnership with the new landowner, ensuring the conservation goals for the property remain for generations to come.
Conservation Tax Credits
On May 6, 2015, the Colorado State Legislature passed Senate Bill 206 which is a huge win for everyone who works with conservation easement tax credits.
Senate Bill 206 allows a landowner with a larger parcel of land to earn up to $1.5M in Colorado tax credits in a single year – no more long, dragged out conservation easement processes and all of the related annual expenses. A landowner with a smaller parcel of land will get up to an additional $25,000 in tax credits to help offset the increased transaction costs. Buyers will be able to purchase the credits they need because more tax credits will be available each year. We are very thankful to the bill’s sponsors, Sen. Ellen Roberts (R-Durango) and Sen. Mary Hodge (D-Brighton), Rep. Alec Garnett (D-Denver) and Rep. Jon Keyser (R-Evergreen), as well as the leadership of the Colorado Coalition of Land Trusts.
Now landowners can be certain that they will receive federal tax benefits from placing conservation easements on their property, in addition to gaining the satisfaction of permanently preserving cherished places.
Benefits to Large Landowners
Large landowners who have had to do their conservation easements over a number of years in order to benefit from the tax credits, now can do essentially four years’ worth of conservation easements in a single year. For nearly a $3M conservation easement donation, SB 206 allows a large landowner to earn $1.5M in Colorado tax credits. The formula is 75% of the first $100,000 and 50% of any remaining donation up to a total credit of $1.5M. This will help large landowners to be able to know that their whole ranch is protected and not have to worry about whether the tax credit program will be discontinued part way through their donation process. This will also help large landowners to only pay their transaction costs one time to conserve nearly $3M worth of conservation land. Under the old law, they would have had to pay for transaction costs every year for four years to earn that number of tax credits. Since transaction costs are averaging $50K in Colorado these days, this is a big savings!
Benefits to Small Landowners
With transaction costs topping $50,000, it is hard for a landowner who is making a $200,000 conservation easement donation to walk away with anything in their pocket as a thank you for permanently protecting their land for future generations. SB 206 allows small landowners to receive up to an additional $25,000 in tax credits because the formula changed to 75% of the first $100,000 and 50% of everything after that. In our example, our landowner would receive $125,000 in tax credits ($75K + $50K).
Benefits to Buyers
The tax credit program has been challenging for buyers for the last four years. With lower volume of tax credits available, it’s been difficult to predict whether a buyer will be able to purchase tax credits for their tax return. SB 206 is retroactive to January 1, 2015. That means that landowners will be creating more tax credits this year and many landowners who have been sitting on the sidelines will be enticed to jump in to participate in the conservation easement process. We anticipate that Colorado will hit or come close to hitting the state’s $45M annual tax credit cap for 2015 now that SB 206 has passed. In the past four years, the largest quantity of tax credits created was $27M so creating $45M would be a huge positive change. Buyers would still have an incentive to purchase credits early, but there would be less of a risk that we’d be all sold out as tax day approaches.
Show your appreciation for those who made SB 206 possible
The road got rocky at times, but thanks to all of the supporters that land conservation has in Colorado, the bill made it to the finish line. The bill received bipartisan sponsorship from Sen. Ellen Roberts (R-Durango) and Sen. Mary Hodge (D-Brighton). House co-sponsors are Rep. Alec Garnett (D-Denver) and Rep. Jon Keyser (R-Evergreen). We are also thankful to the Colorado Coalition of Land Trusts’ lobbying team – Benjamin Waters, Brandon Rattiner and Executive Director Amanda Barker. We are confident that Governor Hickenlooper will sign the bill promptly and it will be official. Click here to read the actual bill – it’s only two pages long!
Economic Benefits of Conservation Easements to the General Public
Colorado leads the nation in land conservation, in part due to the state’s investment in actively protecting and conserving our most important lands. While the tax incentive program offers beneficial incentives to land owners, this program also greatly benefits the general public. Colorado State University just released a study on what Colorado’s investment in land conservation easement is worth to our state and our communities.
Roughly $4-$12 of public benefits are provided by conserved land for each $1 invested by the State of Colorado in the Conservation Easement Tax Credit program. Since 1995 when this program began, residents of Colorado have received an estimated $5.5-$13.7 billion of economic benefits from land conserved by conservation easements while the State has invested roughly $1.1 billion– through approximately $280 million from GOCO and $772 million from the Conservation Easement Tax Credit program.
Land conservation efforts in Colorado target ecologically important areas and provide a significant economic stimulus to the State’s economy and tangible benefits to its residents. Given the perpetual nature of conservation easements, these benefits are expected to continue to accrue into the future and increase on a per-acre basis due to Colorado’s increasing population and wealth and decreasing supply of open lands. These findings suggest past and current land conservation efforts are sound economic investments benefiting current and future Colorado residents.
Colorado is famous for its iconic landscapes. These diverse lands constitute the natural and agricultural heritage of the state and fuel the economy through the sale of farm and ranch products, outdoor recreation, and tourism. Given the role these landscapes play in shaping the identity of the State, it is not surprising that Colorado has repeatedly identified conservation of the state’s natural and agricultural resources as sound public policy and invested significant resources in conservation efforts to maintain these lands into the future. Conservation easements are one of the primary tools to achieve this goal.
Fencing with Wildlife in Mind – A Colorado Parks & Wildlife Guide for Landowners
This publication provides guidelines and details for constructing fences with wildlife in mind. The information it contains has been contributed by wildlife managers, biologists, land managers, farmers, and ranchers. Over time, their observations and research have built a body of knowledge concerning wildlife and fences, including:
- A basic understanding of how ungulates cross fences and the fence designs that
cause problems for moose, elk, deer, pronghorn, and bighorn sheep.
- Fence designs that adequately contain livestock without excluding wildlife.
- Fence designs that effectively exclude ungulates, bears, beavers, and other small
This information is intended to open the conversation about fences and wildlife. This is by no means the “last word.” New fencing materials and designs are continually developed.
Bequests & Planned Giving
Your cherished lands and open space places contribute to a life of fulfillment, happiness, and memories. Protecting your land and your memories for future generations, or making a monetary contribution in support of land protection, can be accomplished through planned giving.
Bequests and planned giving prepare a future gift to La Plata Open Space Conservancy. Through this approach, a landowner or donor can conserve important lands by donating a conservation easement, their property, or financial support to LPOSC through their will.
A bequest is a provision in the landowner’s will or revocable trust that instructs the estate’s executor to convey land or other assets to LPOSC.
A bequest can be made by naming La Plata Open Space Conservancy as a charitable beneficiary either in your existing will (by adding an update, called a codicil) or when establishing a new will. Suggested Language: “I give, devise and bequeath to La Plata Open Space Conservancy, of Durango, Colorado, assets having a value equal to __% of my gross estate to be used for its general charitable purposes.” You can also name La Plata Open Space Conservancy as a beneficiary of your retirement plan. IRA, 401k, 403b’s are popular and effective saving vehicles. If you name LPOSC as a beneficiary in the event of premature death, none of the asset is subject to tax.
If you are considering a gift of land, please call Patrick Barker, Executive Director at (970) 259-3415 to discuss your interest and goals, so we can match it with our conservation strategy. All conversations are without obligation and confidential. If your land has significant conservation values, and no heir is available to protect your land; or if you own highly appreciated property, or have substantial real estate holdings which may result in high capital gains or estate tax burdens, a donation of land to La Plata Open Space Conservancy may be an attractive option. All rights to the land are transferred to La Plata Open Space Conservancy, resulting in an income tax deduction for the full appraised value of the land, reduced estate taxes, and reduction of property taxes.
Transferring a gift of stock is easy to do, and is tax deductible to the fullest extent permitted by law. Your gift amount is based on the current market of value of the stock when you donate it. A gift of appreciated securities is a great way to avoid capital gains taxes, receive an income tax deduction, and support land and water conservation.
If you enjoy the freedom a second home offers, you may be looking to reduce your estate for tax planning purposes. You can make a generous gift of your home to La Plata Open Space Conservancy with the caveat that you retain the right to lifetime use and enjoyment. You will receive income tax benefits in the year of the gift.
Creating a charitable remainder trust can provide a substantial deduction on your income taxes and a reduction in estate taxes. These trusts are often created with properties (real estate or stock), which have a large capital gain. The donor creates the trust and receives back income of at least 5% for life or a term of years, and no capital gains taxes are paid. At the end of the life term or term of years, the property is distributed to La Plata Open Space Conservancy for its conservation work.
Naming La Plata Open Space Conservancy as the beneficiary of your life insurance policy is an easy way to make a sizable gift you may not have thought possible. When you irrevocably sign over ownership of your policy to LPOSC, you will receive an immediate charitable deduction (usually very close to the policy’s cash value).
If you donate a conservation easement, you can still live on and manage your land. The taxable value of your existing land within the estate is significantly reduced, in many cases allowing agricultural or recreational land to remain in the family without significant tax consequences.
La Plata Open Space Conservancy accepts gifts of real estate. Whether you have land to donate for its environmental or conservation value, or land that we can sell or trade to raise funds to preserve critical open space, it is all valuable to LPOSC. This is a gift than can be given during life or bequeathed to LPOSC in order to reduce the value of your estate.
By using the charitable lead trust estate tool, you may provide valuable income to La Plata Open Space Conservancy now, while holding onto the assets you prefer to gift to your heirs. This is a great way to help LPOSC maintain day-to-day operations and to see the benefits of your gift during your lifetime, while preserving the trust property for your heirs. With this tool, you can transfer assets, such as cash, stocks and artwork, to a trust for a set term of years. Each year, payments are made from the trust to La Plata Open Space Conservancy. It is called a lead trust because the charity (the Land Trust) is entitled to the lead (or first) interest in the trust asset, and the noncharitable beneficiary (your heir) receives the remainder (or second-in-line) interest. Once the trust’s term expires, what is left goes to your heirs. Handling assets in this way can shelter the assets’ appreciation from estate taxes.