The Conservation Easement Tax Relief That Ends in 2011
As the Obama Administration took over the leadership of America, one of the areas that it was keen to alter was the large Bush tax cuts that allowed the rich get huge deductions and take home large amounts of refunds.
This was one of the campaign promises made by President Obama prior to taking over the presidency.
However, through various negotiations with the Republicans, many of these tax breaks are still active, with some targeted to end in 2011 while others in 2012.
Therefore, in the next 2 tax returns, taxpayers can take full advantages of these tax breaks before they are no more.
One of the tax breaks that can put hefty tax funds back to your pockets is the Conservation Easement tax break.
The tax relief is set to end in 2011 and therefore, can only be claimed in the 2011 tax returns due in 2012.
The Conservation Easement The conservation easement is a legally binding right to preserve your land and restrict any future development.
It is usually taken on land and property for the purposes of preserving it for historical purposes or as a natural habitation.
Therefore, you give the right of preservation of your property to a historical preservation charity.
In return, you can now claim a tax deduction against the surrender of such rights to the charity.
For your property to qualify for conservation easement, the building must either be certified as a historic building or be in a historic zone.
Other factors such as type and use of the property also come to play when seeking the tax break.
There are also other technical rules and guidelines for qualifications that may require the help of a tax professional.
Calculation of the Deductions The tax deductions that apply for the conservation easement is the difference in value of the property before and after the easement.
Therefore, one needs to do an appraisal both before the easement and after the easement.
The general tax deduction claims are usually 10% of the value of the land.
In other words, on average, the land will depreciate by 10% once you place the conservation easement on your property.
However, there have been cases of higher percentage claims of even 40% that have been forwarded to the IRS as a deduction claim.
A higher percentage claim that way exceeds 10% will usually raise flags for tax fraud.
The IRS has indicted many taxpayers for what they claimed to be an exaggeration of the deductions.
Such court cases however, end up being a tussle between the appraisers and the IRS.
It ends up being very technical, as it deals with the process of appraisal and the IRS has not had much success with such cases.
Either way, claiming a tax deduction of about 10% of the value of your property for such a conservation easement can be quite a tax break.
Owing to the fact that this tax break is only available for 2011, it may be time to consider such an easement for qualifying property before the tax break window shuts.
This was one of the campaign promises made by President Obama prior to taking over the presidency.
However, through various negotiations with the Republicans, many of these tax breaks are still active, with some targeted to end in 2011 while others in 2012.
Therefore, in the next 2 tax returns, taxpayers can take full advantages of these tax breaks before they are no more.
One of the tax breaks that can put hefty tax funds back to your pockets is the Conservation Easement tax break.
The tax relief is set to end in 2011 and therefore, can only be claimed in the 2011 tax returns due in 2012.
The Conservation Easement The conservation easement is a legally binding right to preserve your land and restrict any future development.
It is usually taken on land and property for the purposes of preserving it for historical purposes or as a natural habitation.
Therefore, you give the right of preservation of your property to a historical preservation charity.
In return, you can now claim a tax deduction against the surrender of such rights to the charity.
For your property to qualify for conservation easement, the building must either be certified as a historic building or be in a historic zone.
Other factors such as type and use of the property also come to play when seeking the tax break.
There are also other technical rules and guidelines for qualifications that may require the help of a tax professional.
Calculation of the Deductions The tax deductions that apply for the conservation easement is the difference in value of the property before and after the easement.
Therefore, one needs to do an appraisal both before the easement and after the easement.
The general tax deduction claims are usually 10% of the value of the land.
In other words, on average, the land will depreciate by 10% once you place the conservation easement on your property.
However, there have been cases of higher percentage claims of even 40% that have been forwarded to the IRS as a deduction claim.
A higher percentage claim that way exceeds 10% will usually raise flags for tax fraud.
The IRS has indicted many taxpayers for what they claimed to be an exaggeration of the deductions.
Such court cases however, end up being a tussle between the appraisers and the IRS.
It ends up being very technical, as it deals with the process of appraisal and the IRS has not had much success with such cases.
Either way, claiming a tax deduction of about 10% of the value of your property for such a conservation easement can be quite a tax break.
Owing to the fact that this tax break is only available for 2011, it may be time to consider such an easement for qualifying property before the tax break window shuts.
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