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Conservation Measure Increases Tax Deductions Available to Farmers


Date: 08/23/06

President George Bush on August 17 signed a measure into law expected to aid in the protection of thousands of acres of the nation's shrinking agricultural lands. This will be achieved by increasing tax deductions available to farmers, ranchers and other landowners who donate their property for conservation purposes.

These land donations, known as "conservation easements," allow farmers and ranchers to continue using the land while protecting the property from future development. When landowners donate their property as a conservation easement, whether through the government or a public land trust, they maintain ownership and management of the land while forgoing their rights to develop the land in the future.

The new tax provision expands current tax law in two ways: (1) it raises the cap for such deductions to 50 percent of donor income for all individuals except ranchers and farmers (who are capped at 100 percent of donor income). The current cap is 30 percent for all landowners. (2) It extends the carry-forward period for conservation easement deductions to 15 years from the currently allowable five years.

The tax incentives are available only for 2006 and 2007 tax returns, though there is some hope the incentives could perhaps be extended.

Congressman Mike Thompson (D-CA), who serves on the Ways and Means Committee, spearheaded efforts to create the new tax provision, working with a coalition of farmers, conservationists and government officials.

"This new law is a big win for farmers and our environment," Thompson said. "Agriculture is a core

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Andy Beckstoffer chats with Congressman Mike Thompson and Land Trust of Napa County executive director John Hoffnagle immediately before a press conference held yesterday to spread the word about increased tax incentives for conservation easements.
component of our economy and our American heritage, and we have lost thousands of acres of agricultural lands to urban sprawl over the past decade. It is imperative that we find new solutions for protecting these invaluable areas. Through this provision, we take an important step toward keeping urban development from destroying our farmlands and harming the environment."

Thompson said the nation loses two acres of agricultural land every minute.

"This bill marks a brand new day for efforts to protect our nation's landscapes, natural resources and local economies," Alan Front, senior vice president of the nonprofit Trust for Public Land, said.

"This provision does more to preserve agricultural lands in the long term than any currently available zoning laws," said Andy Beckstoffer, who runs the largest independent family-owned vineyard company in California's North Coast region. "This is bigger than the Napa Ag preserve ordinance," Beckstoffer said. "It's a big deal in terms of stewardship and preserving this valley when we're all gone. This should encourage people to talk to their tax advisers."

Beckstoffer has announced the donation of his portion of Napa's To Kalon Vineyard to The Land Trust of Napa County. Among the most famous of vineyards, To Kalon is located across Highway 29 from Mondavi-Rothchild's Opus One in Oakville.

"I hope the new law encourages my friends and neighbors to put their prime vineyard land in conservation easements," he said. "This is about giving back to your community."

Visit the website of the Land Trust Alliance to learn more about what the new law means for land trusts and conservation.

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